UNIFORM  CLASSIFICATION  OF  ACCOUNTS 


WATER  CORPORATIONS 


s 

302 
517 


PRESCRIBED  BY  THE 


RAILROAD  COMMISSION 


STATE  OF  CALIFORNIA 


Adopted  October  23,  1912      Effective  January  1,  1913 


SAN  FRANCISCO,  C ALT !<>];%•  A 


FIUE.M)  \VM.   Iitrif.ARDSON,  S i ; I'KUI  v  1 1.- v DKVI-  OF  STATE  PRINTING 

SACEAMENTO,    CAI.IFOENIA 
1912 


UNIFORM  CLASSIFICATION  OF  ACCOUNTS 


WATER  CORPORATIONS 


PRESCRIBED  BY  THE 


RAILROAD  COMMISSION 


STATE  OF  CALIFORNIA 


Adopted  October  25,  1912      Effective  January  1,  1913 


SAN  FRANCISCO,  CALIFORNIA 


FRIEND  WM.  Ki<  IIAKDSOX.  SUPERINTENDENT  OF  STATE  PRINTING 

SACRAMENTO,    CALIFORNIA 
1912 


RAILROAD  COMMISSION  OF  CALIFORNIA. 

JOHN  M.  ESHLEMAX,  President Commissioner 

H.  D.  LOVELAXD Commissioner 

ALEXANDER  GORDON  Commissioner 

EDWIN  O.  EDGERTOX Commissioner 

MAX   THELEX.   Attorney Commissioner 

CHARLES  R.  DETRICK,  Secretary. 


UNIfORM  CLASSIflCATION  OP  ACCOUNTS  fOR 
WATER  CORPORATIONS. 


Approved  October  25,   1912. 

T»  All  Water  Corporations: 

This  uniform  system  of  accounts  for  water  corporations  is  established 
and  issued  by  the  Railroad  Commission  of  the  State  of  California  in 
accordance  with  provisions  of  section  48  of  law  of  1911.  known  as  the 
"Public  Utilities  Act,"  in  effect  March  23,  1912. 

Section  48.  ' '  The  Commission  shall  have  power  to  establish  a  system 
of  accounts  to  be  kept  by  the  public  utilities  subject  to  its  jurisdiction, 
or  to  classify  said  public  utilities  and  to  establish  a  system  of  accounts 
for  each  class,  and  to  prescribe  the  manner  in  which  such  accounts  shall 
be  kept.  It  may  also  in  its  discretion  prescribe  the  forms  of  accounts, 
records  and  memoranda  to  be  kept  by  such  public  utilities,  including 
the  accounts,  records  and  memoranda  of  the  movement  of  traffic  as  well 
as  the  receipts  and  expenditures  of  moneys,  and  any  other  forms, 
records  and  memoranda  which  in  the  judgment  of  the  Commission  may 
be  necessary  to  carry  out  any  of  the  provisions  of  this  act.  The  system 
of  accounts  established  by  the  Commission  and  the  forms  of  accounts, 
records  and  memoranda  prescribed  by  it  shall  not  be  inconsistent,  in 
the  case  of  corporations  subject  to  the  provisions  of  the  act  of  congress 
entitled  'An  act  to  regulate  commerce,'  approved  February  fourth, 
eighteen  hundred  and  eighty-seven,  and  the  acts  amendatory  thereof 
and  supplementary  thereto,  with  the  systems  and  forms  from  time  to 
time  established  for  such  corporations  by  the  Interstate  Commerce  Com- 
mission, but  nothing  herein  contained  shall  affect  the  power  of  the 
Commission  to  prescribe  forms  of  accounts,  records  and  memoranda 
covering  information  in  addition  to  that  required  by  the  Interstate 
Commerce  Commission.  The  Commission  may,  after  hearing  had  upon 
its  own  motion  or  upon  complaint,  prescribe  by  order  the  accounts  in 
which  particular  outlays  and  receipts  shall  be  entered,  charged  or 
credited.  Where  the  Commission  has  prescribed  the  forms  of  accounts, 
records  or  memoranda  to  be  kept  by  any  public  utility  for  any  of  its 
business,  it  shall  thereafter  be  unlawful  for  such  public  utility  to  keep 
any  accounts,  records  or  memoranda  for  such  business  other  than  those 
so  prescribed,  or  those  prescribed  by  or  under  the  authority  of  any  other 
state  or  of  the  United  States,  excepting  such  accounts,  records  or  memo- 
randa as  shall  be  explanatory  of  and  supplemental  to  the  accounts, 
records  or  memoranda  prescribed  by  the  Commission." 


4  CLASSIFICATION    OF    ACCOUNTS,    WATER    CORPORATIONS. 

Section  1.  (x)  "The  term  'Water  Corporation'  when  used  in  this 
act.  includes  every  corporation  or  person,  their  lessees,  trustees,  receivers 
or  trustees  appointed  by  any  court  whatsoever,  owning,  controlling, 
operating  or  managing  any  water  system  for  compensation  within  this 
State." 

For  the  purpose  of  this  system  of  accounts,  water  corporations  are 
divided  into  three  classes  as  follows: 

Class  A— Corporations  having  average  annual  operating  reve- 
nues exceeding  $100,000. 

Class  B — Corporations  having  average  annual  operating  reve- 
nues less  than  $100,000,  and  more  than  $25,000. 

Class  C — Corporations  having  average  annual  operating  reve- 
nues less  than  $25,000. 

Any  corporation  in  Classes  B  and  C  may  keep  the  more  extended 
division  or  subdivision  of  any  or  all  the  accounts  shown  herein;  if 
desired,  further  refinements  or  extensions  of  the  scheme  of  accounts  to 
meet  the  needs  of  individual  corporations  may  be  made  by  subdividing 
the  accounts  herein  established,  provided  that  the  integrity  of  the 
accounts  is  not  impaired  and  that  the  titles  and  purposes  of  any  accounts 
so  raised  shall  first  be  filed  with  the  Railroad  Commission. 

All  accounts  shall  be  kept  by  the  double-entry  method  by  all  corpora- 
tions or  persons  within  the  scope  of  this  order.  This  requirement, 
however,  is  not  intended  to  apply  to  purely  statistical  accounts. 

The  first  entry  relating  to  anything  for  which  a  charge  or  a  credit 
is  made  to  any  fixed  capital  or  investment  account  shall  describe  the 
property  in  respect  of  which  the  entry  is  made  with  such  fullness  and 
particularity  as  to  enable  its  identification. 

All  charges  made  to  fixed  capital  or  other  property  account  with 
respect  to  any  property  acquired  on  or  after  January  1,  1913,  shall  be 
the  actual  money  costs  of  the  property.  When  the  consideration  given 
and  for  which  a  charge  is  made  to  any  fixed  capital  or  other  property 
account  is  anything  other  than  money,  the  actual  consideration  shall  be 
fully  described  in  the  entry,  to  enable  identification,  and  the  amount 
charged  shall  be  the  actual  money  value  of  the  consideration  at  the  time 
of  the  transaction. 

Discounts  upon  securities  and  other  commercial  papers  issued  are  to 
be  provided  for  in  other  accounts  and  must  in  no  case  be  included  as 
part  of  the  cost  of  any  property  acquired. 

The  figures  and  letters  prefixed  to  the  titles  of  accounts  in  the  follow- 
ing definitions  and  instructions  are  solely  for  convenience  of  reference, 
and  are  not  to  be  considered  as  part  of  the  title  or  definition. 

All  corporations  are  hereby  required  on  and  after  January  1.  1913, 
to  keep  their  accounts  in  accordance  with  instructions  herein  provided. 


CLASSIFICATION    OF   ACCOUNTS,   WATER  CORPORATIONS.  5 

All  corporations  operating  in  more  than  one  incorporated  city  or 
partly  within  and  partly  without  an  incorporated  city,  shall  showr  sepa- 
rate profit  and  loss  accounts  for  each  incorporated  city,  and  a  single 
profit  and  loss  account  for  all  territory  not  within  an  incorporated  city. 

All  general  expense  common  to  the  entire  system,  together  with  the 
expenses  and  repairs  of  the  pumping,  distributing  and  transmission 
systems,  shall  be  treated  as  common  to  the  entire  system  and  pro-rated 
to  the  several  incorporated  cities  or  other  territory  on  some  equitable 
basis  in  accordance  with  the  benefits  derived. 

NOTE. — Corporations  will  file  with  the  Commission  a  statement  in  complete  detail 
and  full  explanation  supporting  the  basis  on  which  a  pro-rate  of  expenses  is  made. 

In  prescribing  this  system  of  accounts,  the  Commission  does  not  bind 
itself  to  approve  any  item  set  out  in  any  account,  either  as  to  amount 
or  character,  for  rate-fixing  purposes  or  when  authorizing  the  issuance 
of  securities.  The  prescribed  system  of  accounts  is  designed  to  set  out 
the  facts  in  connection  with  the  income,  expenditures,  etc.,  and  there- 
from the  Commission  will  determine,  when  engaged  in  fixing  rates  or 
approving  issues  of  securities,  just  what  consideration  shall  be  given  to 
the  various  items  in  the  several  accounts. 

RAILROAD  COMMISSION  OF  THE   STATE  OF 
CALIFORNIA. 

By  CHARLES  R.  DETRICK,  Secretary. 
Dated:  October  25,  1912. 
Commercial  Building, 

San  Francisco,  California. 


6  CLASSIFICATION   OP   ACCOUNTS,   WATER   CORPORATIONS. 

BALANCE    SHEET    ACCOUNTS. 
Definitions  and   Instructions. 

Balance  Sheet  Accounts  defined.  By  Balance  Sheet  Accounts  are 
meant  those  titles  under  which  the  ledger  accounts  are  combined  and 
summarized  to  show  the  assets,  liabilities,  and  profit  or  loss  of  the 
business  at  a  given  time.  Where  the  title  and  definition  of  a  Balance 
Sheet  Account  clearly  indicate  that  it  is  a  summary  of  other  accounts, 
it  is  not  required  that  a  special  ledger  account  shall  be  raised  under 
such  a  title  to  include  the  balance,  from  the  accounts  usually  carried  on 
the  ledger. 

Assets.  The  term  Assets  is  an  accepted  designation  of  the  wealth 
or  money 's  worth,  either  actual  or  nominal,  in  the  possession  or  control, 
or  at  the  disposal  of  the  individuals,  firms,  corporations,  or  govern- 
ments, when  that  wealth  or  money's  worth  is  considered  as  resources 
for  satisfying  the  obligation  of  debtors  to  creditors,  and  those  of  trus- 
tees to  their  principals ;  and  as  a  basis  of  the  property  rights  of  owners 
or  stockholders,  or  as  resources  classified  according  to  their  character, 
their  relation  to  the  principal  purpose  of  the  business  or  enterprise  in 
which  they  are  utilized,  their  form,  or  the  time  when  and  conditions 
under  which  they  become  owned  or  controlled  by  or  at  the  disposal  of 
the  individual,  firm,  corporation  or  government  utilizing  or  disposing 
of  them. 

Corporate  deficit  is  the  excess  of  the  expense  and  deductions  over 
revenue  or  income,  and  represents  the  amount  due  to  the  corporation 
by  its  proprietors,  or  proprietary  interests,  for  the  replacement  of  lost 
invested  capital. 

Liabilities.  In  accounting,  Liabilities  are  primarily  amounts  of 
money  or  quantities  of  other  specified  forms  of  wealth  which  persons, 
firms,  corporations,  or  governments  are  under  obligation  to  pay  or 
deliver,  or  for  whose  custody,  use,  payment,  or  expenditure  they  are 
responsible,  or  amounts  representing  losses  or  depreciation  of  assets 
incurred  but  not  realized. 

Corporate  surplus  is  the  excess  of  revenue  or  income  over  expenses 
and  deductions,  or  portions  of  the  property  rights  or  equity  of  the 
proprietors. 

ASSET   ACCOUNTS. 

1.  FIXED  CAPITAL  INSTALLED  PRIOR  TO  JANUARY  1,  1913 : 

In  this  account  (on  the  balance  sheet  statement)  shall  be  shown  the 
total  of  the  balance  in  the  ledger  accounts  representing  the  corpora- 
tion's fixed  capital  which  was  installed  prior  to  January  1,  1913,  and 
which  is  still  in  service  at  date  of  the  balance  sheet.  (See  text  of  this 
account  under  Account  No.  C-23,  "Fixed  Capital  Accounts.") 


CLASSIFICATION  OF  ACCOUNTS,  WATER  CORPORATIONS.  7 

2.  FIXED  CAPITAL  INSTALLED  SINCE  DECEMBER  31,  1912: 

This  account  is  a  summary  of  the  accounts  representing  the  corpora- 
tion's fixed  capital  installed  since  December  31,  1912,  and  should  show 
the  cost  of  the  fixed  capital  which  has  been  installed  since  that  date 
and  is  still  in  service  at  the  date  of  the  balance  sheet.  (For  primary 
fixed  capital  accounts  see  Accounts  C-l  to  C-4,  "Intangible  Capital," 
and  Accounts  C-5  to  C-24,  "Tangible  Capital  Accounts.") 

3.  CASH  AND  DEPOSITS: 

A.  Cash.     Charge  to  this  account  the  amount  of  current  funds  avail- 
able for  use  on  demand  in  the  hands  of  financial  officers  and  agents, 
or  deposited  in  banks  or  with  trust  companies,  and  cash  in  transit  for 
which  agents  receive  current  credit. 

B.  Special  Deposits.     Charge  to  this  account  special  deposits  to  pay 
declared  dividends  or  matured  interest,  cash  realized  from  the  sale  of 
securities  held   for   disbursement  when   the  purposes  for  which  the 
securities  are  sold  are  accomplished;  special  deposits  other  than  in 
sinking  funds  for  the  payment  of  debts  and  interest,  not  matured; 
also  money  and   securities  deposited  to  secure  the   performance  of 
contracts,   and  other  deposits  of  a  special  nature  not  provided  for 
elsewhere. 

4.  NOTES  RECEIVABLE: 

Charge  to  this  account  the  cost  of  all  collectible  obligations  in  the 
form  of  Notes  Receivable  or  other  similar  evidences  of  money  receivable 
on  demand  or  within  a  time  not  exceeding  one  year.  This  does  not 
include  interest  coupons.  Time  loans  that  mature  more  than  one  year 
after  date  of  issue  shall  be  considered  as  investments  and  shall  not  be 
included  in  this  account. 

5.  ACCOUNTS  RECEIVABLE: 

Charge  to  this  account  all  amounts  owing  to  the  corporation  upon 
accounts  with  solvent  concerns  other  than  banks,  also  the  cost  of  all 
accounts  and  claims  (except  notes  or  negotiable  bills)  upon  which 
responsibility  is  acknowledged  by  solvent  concerns  or  which  are  suffi- 
ciently secured  to  be  considered  good,  and  of  all  judgments  against 
solvent  concerns  where  the  judgment  is  not  appealable  or  suspended 
through  appeal. 

The  following  sub-accounts  are  provided: 

A.  Accounts  with  System  Corporations.  Include  in  this  account 
amounts  due  from  proprietary,  affiliated,  controlled,  and  controlling 
corporations  on  open  accounts  other  than  those  provided  for  in  Account 
No.  8-B,  "Advances  to  System  Corporations  for  Construction,  Equip- 
ment and  Betterments." 


8  CLASSIFICATION    OF   ACCOUNTS,   WATER   CORPORATIONS. 

B.  Due    from    Consumers    and    Agents.     Include    in    this    account 
amounts  due  from  consumers  and  agents  for  services  rendered  or  billed. 

NOTE. — Accounts  with  consumers  and  agents  shall  be  kept  in  such  manner  as  will 
enable  corporations  to  show  amounts  due  from  consumers  and  agents  for  current 
accounts,  for  delinquent  accounts,  and  amounts  due  from  consumers  whose  service 
has  been  suspended. 

C.  Miscellaneous    Accounts    Receivable.     Include    in    this    account 
amounts  due  from  employees  for  working  funds  advanced,  and  amounts 
due    from    miscellaneous    debtors    upon    open    accounts    considered 
collectible. 

6.  INTEREST  AND  DIVIDENDS  RECEIVABLE: 

Charge  to  this  account  all  interest  considered  collectible  accrued  but 
not  yet  collected  upon  bonds,  notes  or  other  commercial  paper,  held  by 
or  for  the  benefit  of  the  corporation;  all  dividends  declared  or  guar- 
anteed by  solvent  concerns  but  not  yet  collected,  the  right  to  which  is 
in  the  corporation. 

7.  OTHER  CURRENT  ASSETS: 

Charge  to  this  account  the  cost  of  all  current  assets  which  are  not 
includible  under  any  of  the  foregoing  accounts.  By  Current  Assets 
are  meant  only  those  things  that  are  readily  convertible  into  money 
and  which  are  held  not  as  investments,  but  with  the  intent  of  being 
presently  converted  into  money. 

8.  INVESTMENTS: 

This  account  includes  the  cost  of  all  properties  acquired  or  held  not 
for  use  in  present  operations,  but  as  a  means  of  obtaining  and  exer- 
cising control  over  other  corporations,  or  for  income  to  be  derived  from 
them,  or  for  a  rise  in  value,  or  for  devotion  to  future  operations,  and 
for  securing  other  business  advantages  that  may  seem  possible  through 
their  acquisition  and  possession. 

It  is  subdivided  as  follows : 

A.  Securities  of  Other  Corporations.  Include  in  this  account  the  cost 
of  stocks  and  bonds  and  other  evidences  of  indebtedness  issued  by  other 
companies.  This  account  does  not  include  any  stocks,  bonds,  or  other 
evidences  of  indebtedness  issued  or  assumed  by  the  accounting  corpora- 
tion. Class  A  corporations  will  subdivide  this  account  so  as  to  show 
separately  the  cost  of 

a.  Stocks  of  System  Corporations. 

I.  Funded  Debt  of  System  Corporations. 

c.  Miscellaneous  Stocks. 

d.  Miscellaneous  Bonds. 

NOTE. — In  the  annual  reports  to  the  Railroad  Commission,  investments  will  be 
required  'to  be  classified  so  as  to  show  those  held  subject  to  a  lien  of  some  character 
and  those  held  free  of  all  lien  or  pledge. 


CLASSIFICATION    OF   ACCOUNTS,    WATER    CORPORATIONS.  9 

B.  Advances  to  Syston  ('urix>i-<iti<>nx  for  Construction,  Equipment  and 
Betterments.  Include  in  this  account  advances  to  proprietary,  affiliated, 
controlled  and  controlling  corporations  to  enable  such  corporations  to 
pay  for  construction,  equipment,  additions,  and  betterments,  when  such 
advances  are  of  a  permanent  nature  (i.  e.,  where  there  is  not  an  under- 
standing that  the  advances  are  to  be  repaid  within  one  year)  or  when 
it  is  understood  and  intended  that  reimbursement  shall  be  made  by  the 
issue  of  the  securities  of  the  debtor  corporation. 

NOTE. — Temporary  advances  on  open  accounts  to  system  corporations  and  such 
advances  for  purposes  other  than  construction,  equipment,  additions  and  betterments 
.shall  be  included  in  accounts  receivable. 

( '.  Miscellaneous  Investments.  Include  in  this  account  all  other  in- 
vestments of  a  permanent  nature  in  intangibles  and  in  physical  property 
not  held  for  the  operation  of  the  company's  plant  as  a  water  system. 

NOTE. — In  the  annual  reports  to  the  Railroad  Commission,  investments  will  be 
required  to  be  classified  so  as  to  show  those  held  subject  to  a  lien  of  some  character 
and  those  held  free  of  all  lien  or  pledge. 

9.  MATERIALS  AND  SUPPLIES  : 

Charge  to  this  account  the  cost  (including  transportation)  of  all 
materials  and  supplies  acquired,  and  the  value  of  discarded  equipment 
and  of  equipment,  materials,  and  supplies  returned  to  store,  regardless 
of  whether  the  same  are  intended  to  be  consumed  in  construction  or  in 
operation,  or  later  to  be  sold.  Where  discounts  recovered  through 
prompt  payment  are  not  credited  to  the  particular  bills,  the  cost  at 
which  such  materials  and  supplies  shall  be  charged  shall  be  the  invoice 
cost,  and  any  discounts  recovered  through  prompt  payment  of  bills  for 
such  materials  and  supplies  shall  be  credited  to  Account  No.  C-20, 
"Interest  During  Construction,"  or  to  Account  No.  E— 45,  "Undis- 
tributed Adjustments-Balance,"  according  as  such  materials  and  sup- 
plies are  intended  for  construction  or  for  operation. 

When  the  use  of  any  tangible  fixed  capital  is  discontinued  it  shall  be 
treated  as  retired;  the  original  cost  of  such  capital  shall  be  credited  to 
the  fixed  capital  account  in  which  carried,  and  its  value,  if  any,  as 
second-hand  material  or  junk  shall  be  charged  to  this  account,  or  an 
appropriate  sub-account.  If  such  value  is  not  known  and  cannot 
readily  be  determined,  it  shall  be  estimated,  and  errors  in  such  esti- 
mates, when  determined,  shall  be  adjusted  through  the  accounts  in- 
volved during  the  year  in  which  the  estimates  were  made ;  if  later,  then 
Hi  rough  the  "Corporate  Surplus  or  Deficit"  account. 

Inventories  of  materials  and  supplies  shall  be  taken  at  least  annually, 
and  any  shortages  or  overages  disclosed  by  such  inventories  shall  be 
credited  or  debited  to  this  account  and  debited  or  credited  to  Account 
No.  E-45,  "Undistributed  Adjustments-Balance,"  or  to  Account  No.  4, 
"Supply  Expense"  (if  that  account  is  used),  in  case  such  shortages  or 


10  CLASSIFICATION    OF   ACCOUNTS,   WATER   CORPORATIONS. 

o  \vraires  cannot  be  assigned  to  specific  accounts.  Shortages  may,  how- 
••vt-r.  be  charged  directly  to  "Corporate  Surplus  or  Deficit."  Where 
materials  and  supplies  from  stores  have  been  used  in  construction,  and 
it  is  estimated  that  part  of  the  shortage  or  overage  is  due  to  such 
materials  and  supplies  having  been  actually  applied  to  construction,  a 
proper  proportion  of  the  inventory  shortage  or  overage  should  be 
charged  or  credited  to  Account  No.  C-19-E,  "  Miscellaneous  Construc- 
tion Expenditures,"  directly  or  through  Account  No.  4,  "Supply  Ex- 
pense. ' ' 

10.  SINKING  FUNDS: 

Charge  to  this  account  the  amount  of  cash  and  the  cost  of  live  securi- 
ties in  the  hands  of  trustees  of  sinking  and  other  funds  for  the  purpose 
cf  redeeming  outstanding  obligations,  also  amounts  deposited  with  such 
trustees  on  account  of  mortgaged  property  sold.  A  separate  account 
shall  be  raised  for  each  sinking  fund.  When  any  security  of  the  same 
issue  as  that  for  which  a  sinking  fund  is  created  is  acquired  through 
the  operation  of  the  sinking  fund,  the  par  value  of  the  security  shall  be 
charged  to  the  liability  account  to  which  it  stands  credited  and  not  to 
the  sinking  fund  account. 

11.  OTHER  SPECIAL  FUNDS: 

Charge  to  this  account  the  amount  of  cash  and  the  cost  of  securities 
held  in  trust  by  or  for  the  corporation  in  insurance  funds,  pension 
funds,  hospital  funds,  and  other  similar  special  funds  not  provided  for 
in  the  preceding  accounts.  A  separate  account  shall  be  raised  for  each 
fund. 

NOTE. — Securities  issued  or  assumed  by  the  corporation  may  be  included  among 
the  assets  of  special  funds  only  when  they  represent  the  actual  investment  of  funds 
held  in  trust  and  when  the  fund  so  held  would  share  in  the  distribution  of  assets 
covered  by  the  securities  in  case  of  foreclosure  or  dissolution. 

12.  TREASURY  SECURITIES  : 

Charge  to  this  account  the  par  value  of  all  stocks  and  bonds  which 
have  been  authorized  and  issued  by  the  corporation  or  assumed  by  it 
and  held  by  the  Treasurer  or  other  fiscal  agent  of  the  corporation  for 
its  benefit.  When  such  securities  are  sold  their  par  value  shall  be 
credited  to  this  account. 

13.  PREPAID  EXPENSES: 

A.  Prepaid  Bents.     Charge  to  this  account  the  amount  of  rents  paid 
in  advance  of  the  enjoyment  of  the  term.     As  the  term  is  consumed, 
credit  this  account  at  monthly  intervals  and  debit  the  appropriate  rent 
account  with  the  amount  applicable  to  the  month. 

B.  Prepaid  Taxes.     Charge  to  this  account  the  excess  of  taxes  paid 
over  the  amount  properly  chargeable  to  Income  or  other  accounts  as 
shown  by  the  debit  balance  in  the  Tax  Liability  account.     (See  Account 
No.  26.  "Taxes  Accrued.") 


rvnoN  OF  A<A-orxTs.  YVATKK  CORPORATIONS.  11 

(".  /'/> /></iW  Insuratn't.  \Yhen  premiums  on  insurance  policies  are 
paid  in  advance  of  their  neevnal.  the  amount  prepaid  shall  be  charged 
to  this  account.  As  such  premiums  accrue,  they  shall  be  credited  at 
monthly  intervals  to  this  account  and  charged  to  the  appropriate 
expense  aeeonnt. 

D.  Otln  /•  /'/•< /!</////«( ~nts.  When  prepayments  are  made  for  anything: 
other  than  as  provided  for  in  the  three  preceding  accounts,  the  amount 
of  such  prepayments  shall  be  included  in  this  account. 

14.  UN-AMORTIZED  DISCOUNT  ON  SECURITIES  AND  EXPENSE: 

AY  hen  capital  stock,  funded  debt  securities  and  other  evidences  of 
indel'tedness  are  disposed  of  for  a  consideration  whose  cash  value  is 
less  than  the  sum  of  the  par  value  of  the  securities  or  other  evidences 
pf  indebtedness  and  the  interest  thereon  accrued  at  the  time  the 
transfer  takes  place,  the  excess  of  such  sum  of  the  par  value  and 
arrrued  interest  over  the  cash  value  of  the  consideration  received  shall 
be  charged  to  this  account.  To  this  account  shall  also  be  charged  all 
expense  connected  with  the  issue  and  sale  of  evidences  of  debt,  such 
•'••es  for  drafting  mortgages  and  trust  deeds,  fees  and  taxes  for 
••dins  mortgages  and  trust  deeds;  cost  of  engraving  and  printing 
bonds,  certificates  of  indebtedness,  and  other  commercial  paper  having 
a  life  of  more  than  one  year ;  fees  paid  trustees,  provided  for  in  mort- 
gages and  trust  deeds;  fees  and  commissions  paid  underwriters  and 
brokers  for  marketing  such  evidences  of  debt,  and  other  like  expense. 
At  or  before  the  close  of  each  fiscal  period  thereafter,  a  proportion  of 
such  discount  and  expense  on  securities  representing  indebtedness 
based  upon  the  life  of  the  security  to  maturity  shall  be  credited  to  this 
account  and  eharged  to  Account  No.  109,  "Amortization  of  Debt  Dis- 
count and  Expense."  Such  discount  and  expense  may,  if  desired,  be 
amortized  more  rapidly  through  charges  of  all  or  any  part  of  it,  either 
at  the  time  of  issue  or  later,  to  Account  No.  114-G,  "Other  Deductions 
from  Surplus." 

15.  OTHER  SUSPENSE: 

This  account  includes  all  debits  not  elsewhere  provided  for  and  the 
proper  final  disposition  of  which  is  uncertain.  It  will  include  all  such 
matters  as  expense  of  preliminary  surveys,  plans,  investigations,  etc., 
made  tor  determining  the  feasibility  of  projects  under  contemplation. 
Should  any  such  project  later  be  carried  to  completion,  such  amounts 
shall  be  credited  to  this  account  and  charged  to  the  proper  capital 
account  or  accounts;  should  it  be  abandoned,  such  amounts  shall  be 
charged  to  "Corporate  Surplus  or  Deficit." 

Wh.-n  the  proper  disposition  of  any  matter  charged  to  this  account 
is  determined,  it  shall  be  credited  to  this  account  and  charged  to  the 
appropriate  account  or  accounts. 


12  CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS. 

16.  CONSTRUCTION  WORK  IN  PROGRESS: 

In  this  account  may  be  included  amounts  expended  upon  plant  that 
is  in  process  of  construction  under  estimates  or  work  orders  but  is  not 
ready  for  service  at  the  date  of  the  balance  sheet.  It  includes,  also, 
such  proportion  of  plant  supervision  expenses,  engineering  expenses, 
tool  expenses,  supply  expenses,  and  general  expenses  as  may  be  properly 
chargeable  to  the  construction  work  included  under  this  account. 

When  the  work  is  completed  on  any  job,  the  cost  of  which  has  been 
included  in  this  account,  the  sub-account  covering  that  job  shall  be 
credited  with  the  amount  at  which  it  stands  charged,  and  the  appro- 
priate fixed  capital  or  other  accounts  shall  be  concurrently  charged; 
but  in  no  case  shall  any  expenditure  be  carried  in  this  account  beyond 
the  close  of  the  fiscal  year  next  succeeding  that  in  which  the  expendi- 
ture is  made. 

17.  CORPORATE  DEFICIT: 

Under  this  head  should  be  shown  the  debit  balance,  if  any,  in  the 
"Corporate  Surplus  or  Deficit  Account." 

LIABILITY   ACCOUNTS. 

18.  CAPITAL  STOCK: 

To  this  acount  should  be  credited  the  par  value  of  the  capital  stock 
issued  and  outstanding,  including  any  that  may  be  in  the  corporation's 
treasury,  or  held  in  trust  for  it,  or  in  sinking  or  other  funds. 

19.  INSTALLMENTS  ON  STOCK  SUBSCRIPTION: 

To  this  account  should  be  credited  the  amounts  received  for  capital 
stock  to  be  paid  for  in  installments,  until  such  stock  is  issued. 

20.  FUNDED  DEBT: 

The  funded  obligations  of  the  Corporation  shall  be  divided  into 
classes,  each  class  agreeing  in  the  following  four  characteristics : 

1.  Mortgage  or  other  lien,  or  security  therefor. 

2.  Rate  of  Interest. 

3.  Interest  Date. 

4.  Date  of  Maturity. 

A  separate  sub-account  shall  be  opened  for  each  mortgage,  note,  or 
other  lien  or  security,  and  no  accounts  or  debts  not  agreeing  in  the 
characteristics  as  above  shall  be  included  in  the  same  sub-account. 

To  the  proper  sub-account  shall  be  credited  when  issued  the  total 
receipts  from  the  sale  of  evidence  of  indebtedness  secured  by  the  mort- 
gage, etc.  The  entry  in  any  account  shall  show  also  the  purpose  for 
v.hich  funded  debt  is  issued  and  shall  make  intelligible  reference  to 
the  book,  page,  and  account  wherein  are  shown  any  discount  or  pre- 
mium realized  on  the  amount  issued  or  assumed. 


CLASSIFICATION    OF    ACCOUNTS,    WATER    CORPORATIONS.  13 

If  the  consideration  received  for  the  indebtedness  is  other  than  money 
the  entry  shall  show  to  whom  issued  and  shall  describe  with  sufficient 
particularity  to  identify  the  actual  consideration  received. 

If  the  issue  in  any  case  is  to  an  agent  of  an  undisclosed  principal, 
the  name  and  address  of  agent  and  the  fact  of  his  agency  must  be 
shown  in  the  entry;  also  short  time  securities  or  notes  and  mortgages 
payable  which  are  due  at  a  date  over  one  year  in  the  future. 

21.  RECEIVER'S  CERTIFICATES: 

AYhen  any  receiver  acting  under  the  orders  of  a  court  of  competent 
jurisdiction  is  in  possession  of  the  property  of  the  corporation  and 
under  the  orders  of  such  court  issues  certificates  of  indebtedness  charge- 
able upon  such  property,  the  par  value  of  such  certificates  shall  be 
credited  to  this  account.  Interest  accruing  upon  such  certificates  shall 
also  be  credited  monthly  to  this  account. 

22.  ADVANCES  FROM  SYSTEM  CORPORATIONS  FOR  CONSTRUCTION,  EQUIP- 

MENT AND  BETTERMENTS: 

Civdit  this  account  with  advances  from  proprietary,  affiliated,  con- 
trolled and  controlling  corporations  to  enable  the  accounting  corpora- 
tion to  pay  for  construction,  equipment,  additions  and  betterments 
when  such  advances  are  of  a  permanent  nature  (i.  e.,  where  there  is  not 
an  understanding  that  the  advances  are  to  be  repaid  within  one  year) 
or  when  it  is  understood  and  intended  that  a  reimbursement  shall  be 
made  by  the  issue  of  the  securities  of  the  debtor  corporation. 

NOTE. — Temporary  advances  on  open  accounts  for  system  corporations  and  such 
advances  for  purposes  other  than  construction,  equipment,  additions  and  betterments 
shall  be  included  in  accounts  payable. 

23.  NOTES  PAYABLE: 

AY  hen  any  note  or  draft  which  matures  not  later  than  one  year  after 
date  of  issue  or  of  demand  is  issued  or  the  primary  liability  thereon 
assumed  by  the  corporation,  the  par  value  thereof  shall  be  credited  to 
this  account  and  when  it  is  paid  it  shall  be  charged  to  this  account  and 
credited  to  "Cash"  or  other  suitable  account  except  secured  notes 
proper  to  be  included  in  Account  No.  20,  "Funded  Debt." 

24.  ACCOUNTS  PAYABLE  : 

A.  Arcoutitx   with  .sv/x/o/<.  corporations.     Credit  to  this  account  the 
amount.^  nwinir  to  proprietary,  affiliated,  and  controlled  or  controlling 
corporations  on  open  accounts  other  than  those  provided  for  in  Account 
No.  '2'2.  "Advances  from  System  Corporations  for  Construction,  Equip- 
ment and  Betterments." 

B.  Audited  vouchers  and  ivages  unpaid.     Credit  to  this  account  the 
amount  of  audited  vouchers  or  accounts  and  audited  payrolls  unpaid 
on  the  date  of  the  balance  sheet.     Include  also  the  amount  of  unclaimed 


14  CLASSIFICATION    OP   ACCOUNTS,   WATER   CORPORATIONS. 

wages  and  outstanding  pay  and  time  cheeks  issued  in  payment  of 
wages. 

C.  Consumer's  Deposits.     Credit  to  this  account  as  such  deposits  are 
made  all  cash  deposited  with  the  corporation  by  consumers  for  water 
service  as  security  for  the  payment  of  bills.     Deposits  refunded  should 
be  'charged  to  this  account  and  credited  to  cash.     Deposits  applicable 
to  uncollectible  water  bills  should  be  credited  to  the  account  of  the 
consumer  and  debited  to  this  account. 

D.  Miscellaneous    Accounts    Payable.     Credit    to    this    account    all 
amounts  owing  to  miscellaneous  creditors  on  open  accounts  and  not 
provided  for  elsewhere. 

25.  INTEREST  ACCRUED: 

Credit  to  this  account  at  the  close  of  each  month  the  interest  accrued 
during  the  month  upon  the  interest-bearing  indebtedness,  issued  or 
assumed  by  the  corporation,  except  interest  on  judgments  and  receivers ' 
certificates.  When  such  interest  is  paid  it  should  be  charged  to  this 
account  and  credited  to  "Cash"  or  other  suitable  account.  The  interest 
accruing  on  any  judgment  against  the  corporation  or  upon  any 
receivers'  certificates  shall  be  credited  to  the  account  to  which  such 
judgment  or  receivers'  certificates  stand  credited. 

26.  TAXES  ACCRUED: 

To  this  account  should  be  credited  taxes  that  have  accrued  but  are 
not  yet  due.  The  full  amount  of  taxes  for  the  year  should  be  estimated 
and  charged  equally  (one  twelfth)  to  the  expenses  (Account  No.  E-50) 
of  each  month,  with  corresponding  credit  to  this  account ;  as  soon  as  the 
amount  of  the  taxes  for  the  period  is  known,  the  accounts  should  be 
adjusted  to  conform.  When  taxes  become  due  and  are  vouchered.  they 
should  be  charged  to  this  account. 

27.  DIVIDENDS  DECLARED  : 

When  any  dividend  is  declared,  the  amount  of  the  dividend  shall  be 
credited  to  this  account  and  here  remain  until  it  is  paid,  when  the 
amount  of  the  payment  shall  be  charged  to  this  account  and  credited 
to  "Cash"  or  other  suitable  account. 

28.  SERVICE  BILLED  IN  ADVANCE  : 

When  bills  are  made  for  water  to  be  furnished  in  future  months,  and 
the  amount  of  the  bills  is  included  in  "Accounts  Receivable,"  but  not 
in  the  revenue  accounts,  the  proportion  of  the  bills  applicable  to  future 
months  shall  be  credited  to  this  account.  As  the  term  for  which  the 
bills  are  made  expires,  the  appropriate  revenue  account  should  be 
credited  and  this  account  debited  with  the  amount  applicable  to  the 
current  month. 


CLASSIFICATION  OF  ACCOUNTS,  WATER  CORPORATIONS.  15 

29.  RESERVE  FOR  ACCRUED  DEPRECIATION: 

Credit  to  this  account  or  to  appropriate  sub-accounts  such  amounts 
as  are  concurrently  charged  to  Account  No.  E-52,  "Depreciation  of 
Plant  and  Equipment. ' '  Charge  to  this  account  or  to  appropriate  sub- 
accounts  (except  as  prescribed  in  the  notes  hereunder)  the  realized 
depreciation  in  the  several  classes  of  tangible  fixed  capital;  that  is,  the 
difference  between  the  original  cost  (estimated  if  not  known)  of  prop- 
erty relinquished,  retired,  or  destroyed,  and  the  value  of  any  salvage 
recovered.  Charge  also  to  this  account  such  part  of  the  expenditures 
for  repairs  concurrently  credited  to  Account  No.  E-49,  "Repairs 
Charged  to  Reserves — Cr."  as  may  have  been  provided  for  in  estimat- 
ing the  rate  of  depreciation.  (See  Account  No.  E-52,  "Depreciation 
of  Plant  and  Equipment.") 

NOTE  A. — When  any  property  is  retired  which  was  installed  prior  to  the  raising 
of  the  "Reserve  for  Accrued  Depreciation,"  only  such  portion  of  the  realized  depreci- 
ation shall  be  charged  to  the  reserve  as  is  due  to  life  in  service  after  the  establish- 
ment of  the  reserve  ;  this  portion  may  be  estimated  on  the  basis  of  the  proportion 
which  the  life  in  service  of  the  property  in  question  after  the  establishment  of  the 
reserve  bears  to  its  entire  life  in  service.  The  remainder  of  the  realized  depreciation 
shall  be  charged  to  Account  No.  114-B,  "Realized  Depreciation  Not  Covered  by  Re- 
serves," unless  the  corporation  has  on  its  books  a  depreciation  reserve  accumulated 
prior  to,  the  establishment  of  the  prescribed  depreciation  rules,  in  which  case  such 
other  remainder,  or  so  much  of  it  as  may  be  provided  for,  shall  be  charged  to  such 
other  reserve  account. 

NOTE  B. — When  any  property  is  retired  whose  book  value  has  been  reduced  by 
writing  off  estimated  depreciation,  only  that  part  of  the  realized  depreciation  which 
has  not  already  been  written  off  shall  be  charged  as  above  to  the  "Reserve  for 
Accrued  Depreciation,"  or  Account  No.  114-B,  "Realized  Depreciation  Not  Covered  by 
Reserves." 

NOTE  C. — When  any  property  is  retired  whose  book  value  is  greater  than  the 
known  or  estimated  cost,  such  excess  shall  be  charged  to  "Corporate  Surplus  or 
Deficit"  and  the  realized  depreciation  shall  be  charged  as  elsewhere  directed. 

NOTE  D. — If  any  property  is  sold  for  more  than  its  original  cost,  the  amount  of 
depreciation,  if  any,  accrued  and  credited  to  a  reserve  in  respect  thereof,  shall  be 
determined  as  accurately  as  possible  and  chargo4  to  such  reserve.  The  sum  of  the 
amount  so  charged  and  the  excess  of  the  selling  price  over  the  cost  of  the  property 
shall  be  credited  to  Account  No.  115,  "Miscellaneous  Additions  to  Surplus." 

30.  RESERVE  FOR  AMORTIZATION  OF  INTANGIBLE  CAPITAL: 

Credit  to  this  account  such  amounts  as  are  concurrently  charged  to 
Account  No.  111-B,  "Amortization  of  Landed  Capital,"  and  to  Ac- 
count No.  E-51,  "Amortization  of  Franchises  and  Patents."  Charge 
to  this  account  when  any  franchise,  patent,  or  landed  capital  expires 
or  is  relinquished,  the  amount  at  which  it  stood  charged  in  the  corpor- 
ation's fixed  capital  accounts,  or  such  amount  as  has  been  previously 
credited  to  this  reserve  in  respect  of  such  capital  if  the  amortization 
has  not  been  fully  accomplished.  That  portion  of  its  cost  which  has 
not  been  covered  by  credits  to  the  reserve  or  previously  written  off  shall 
be  charged  to  "Corporate  Surplus  or  Deficit"  account  as  "Amortization 
Unprovided  for  Elsewhere." 

31.  UNAMORTIZED  PREMIUM  ON  DEBT: 

When  funded  debt  securities  or  other  evidences  of  indebtedness 
issued  or  assumed  by  the  corporation  are  disposed  of  for  a  considera- 


16  CLASSIFICATION   OP   ACCOUNTS,   WATER   CORPORATIONS. 

tion  whose  cash  value  is  greater  than  the  sum  of  the  par  value  of  such 
securities  or  other  evidences  of  indebtedness  and  the  interest  thereon 
accrued  at  the  time  the  transfer  takes  place,  the  excess  of  the  cash  value 
of  such  consideration  received  over  the  sum  of  the  par  value  of  the 
securities  or  other  evidence  of  indebtedness  and  the  accrued  interest 
shall  be  credited  to  this  account.  At  monthly  intervals  thereafter  a 
proportion  of  such  premium  based  upon  the  life  to  maturity  of  the 
security  or  other  evidence  of  indebtedness  shall  be  charged  to  this 
account  and  credited  to  Account  No.  110,  "Amortization  of  Premium 
on  Debt — Cr. ' '  in  the  Income  account. 

32.  CASUALTY  AND  INSURANCE  RESERVES: 

When  any  admitted  liability  arises  because  of  loss  or  damage  to  the 
property  of  others,  or  of  injuries  to  employees  or  other  persons,  the 
amount  of  the  liability  may  (if  not  previously  provided  for  by  insurance 
or  self -insurance)  be  charged  to  the  appropriate  operating  expense  or 
other  accounts  and  credited  to  this  account,  against  which  (in  such  case) 
the  actual  cost  of  satisfaction  of  the  liability  shall  be  charged  when 
the  matter  is  determined.  If  the  extent  of  the  liability  can  not  be 
ascertained  promptly  after  the  liability  arises,  it  may  be  estimated  as 
accurately  as  practicable  for  the  purpose  of  determining  the  immediate 
charge  to  the  expense  or  other  appropriate  account,  in  which  case  the 
matter  shall  be  adjusted  when  the  extent  of  the  liability  is  definitely 
ascertained.  If  the  loss  is  of  such  character  that  it  is  in  whole  or  in 
part  indemnifiable  under  any  contract  of  insurance  carried  by  the 
corporation,  the  indemninable  portion  of  the  loss  shall  be  charged  to 
the  insurer  and  credited  to  "Casualty  and  Insurance  Reserves."  Also 
credit  to  this  account  the  amounts  charged  to  operating  expense  Ac- 
count Xo.  E-42,  "Insurance,"  to  cover  self -carried  risks. 

33.  INCOME  INVESTED  SINCE  DECEMBER  31,  1912,  IN  FIXED  CAPITAL: 
Credit  to  this  account  such  amounts  from  income  or  surplus  as  are 

definitely  set  aside  to  cover  expenditures  for  extensions  or  improve- 
ments of  the  fixed  capital  of  the  accounting  corporation ;  such  appro- 
priations include  those  made  discharging  the  principal  (less  the  dis- 
count, if  any,  suffered  at  the  time  of  sale)  of  any  obligations  incurred 
in  the  acquisition  of  any  property  whose  cost  is  carried  in  the  fixed 
capital  accounts.  The  amounts  credited  to  this  account  shall  be  con- 
currently charged  to  "Corporate  Surplus  or  Deficit"  account  as 
"Appropriations  to  Reserves." 

This  account  should  not  include  temporary  appropriations  for  the 
acquisition  of  property  the  cost  of  which  is  intended  later  to  be  met  by 
an  issue  of  securities,  nor  appropriations  for  the  payment  of  obligations 
which  are  intended  to  be  replaced  by  new  issues. 


CLASSIFICATION  OF  ACCOUNTS,  WATER  CORPORATIONS.  17 

34.  RESERVES  INVESTED  IN  SINKING  FUNDS: 

Credit  to  this  account  appropriations  from  surplus  specifically  in- 
vested or  set  aside  in  the  hands  of  trustees  for  sinking  and  redemption 
funds,  including  accretions  to  such  funds. 

35.  OTHER  RESERVES  FROM  INCOME  OR  SURPLUS: 

Credit  to  this  account  all  appropriations  of  income  or  surplus  held 
in  reserve,  other  than  appropriations  invested  in  fixed  capital  since 
December  31,  1912,  and  appropriations  invested  in  sinking  or  redemp- 
tion funds.  A  separate  sub-account  shall  be  raised  for  each  reserve, 
and  the  entries  in  such  sub-accounts  will  be  required  to  be  shown  sepa- 
rately in  the  annual  report  to  the  Railroad  Commission. 

This  account  includes  the  unexpended  balance,  if  any,  of  appropri- 
ations intended  to  be  invested  in  fixed  capital,  and  such  appropriations 
to  sinking  or  redemption  fund  reserves  as  are  not  specifically  invested. 

36.  CORPORATE  SURPLUS  UNAPPROPRIATED  : 

Under  this  head  should  be  shown  the  credit  balance,  if  any,  in  the 
' '  Corporate  Surplus  or  Deficit ' '  account. 

FIXED    CAPITAL    ACCOUNTS. 

FIXED  CAPITAL  DEFINED  : 

By  the  fixed  capital  of  a  corporation  is  meant  the  property,  both' 
tangible  and  intangible,  which  is  devoted  to  the  accomplishments  of  the 
principal  purposes  of  ite  business  and  which  has  an  expectation  of  life 
in  service  of  more  than  one  year  from  date  of  installation  in  service 
(exception  being  made  in  the  case  of  hand  tools  and  other  small  portable 
tools  that  may  be  lost  or  stolen). 

COST  OF  FIXED  CAPITAL  : 

The  term  "Cost"  as  used  in  the  texts  for  fixed  capital  accounts 
means  the  original  cost  to  the  corporation.  It  includes  not  only  the 
costs  of  labor,  materials  and  supplies  directly  employed  or  consumed 
in  the  construction  and  installation  of  property  classed  as  fixed  capital, 
but  also  the  cost  of  preliminary  plans  and  surveys  and  such  portion  of 
the  expenses  for  engineering  and  plant  supervision  and  general  expenses 
as  may  be  chargeable  to  the  fixed  capital  accounts  under  an  equitable 
p]an  for  the  apportionment  of  such  expenses. 

Intangible  Capital. 

C-l.  ORGANIZATION  : 

Charge  to  this  account  all  fees  paid  to  governments  for  the  privilege 
of  incorporation,  and  all  office  and  other  expenditures  incident  to  organ- 
izing the  corporation  or  other  enterprise  and  putting  it  in  readiness  to 
do  business.  This  includes  the  cost  of  preparing  and  distributing 


18  CLASSIFICATION   OP   ACCOUNTS,   WATER   CORPORATIONS. 

prospectuses,  the  cost  of  soliciting  subscriptions  for  stock  (but  not  for 
loans  nor  for  the  purchase  of  bonds  or  other  evidences  of  indebtedness) . 
cash  fees  paid  to  promoters,  and  the  actual  cash  value  at  the  time  of 
organization  of  securities  paid  to  promoters  for  their  services  in  organ- 
izing the  enterprise;  counsel  fees;  cost  of  preparing  and  issuing 
certificates  of  stock,  and  cost  of  procuring  certificates  of  necessity  from 
state  authorities,  and  like  other  costs.  This  account  shall  not  include 
any  discounts  upon  stocks  or  other  securities  issued,  nor  shall  it  include 
any  costs  incident  to  negotiating  loans  or  selling  bonds  or  other  evidence 
of  indebtedness. 

NOTE. — Costs  incident  to  preparing  and  filing  certificates  of  authorization  of  in- 
crease of  capital  stock,  and  to  the  negotiation  and  issue  of  stock  thereunder,  are 
classed  as  additions.  The  cost  of  preparing  and  filing  certificates  of  amendment  of 
articles  of  incorporation  is  classed  as  a  betterment.  The  cost  of  preparing  and  filing 
papers  in  connection  with  the  extension  of  the  term  of  incorporation  or  with  reincor- 
poration  consequent  upon  reorganization  shall  be  classed  as  a  renewal. 

C-2.  FRANCHISES  AND  WATER  RIGHTS  : 

Charge  to  this  account  the  amount  (exclusive  of  any  tax  or  annual 
charge)  actually  paid  to  the  State,  or  to  a  political  subdivision  thereof, 
as  the  consideration  for  the  grant  of  such  franchise  or  water  right  as 
is  necessary  to  the  conduct  of  the  corporation's  water  operations.  If 
any  such  franchise  is  acquired  by  assignment,  the  charge  to  this  account 
in  respect  thereof  must  not  exceed  the  amount  actually  paid  therefor 
by  the  corporation  to  its  assignor. 

Any  excess  of  the  amount  actually  paid  by  the  corporation  over  the 
amount  paid  by  the  original  grantee  to  the  grantor  of  the  franchise 
shall  be  charged  to  Account  No.  4,  "Other  Intangible  Capital."  If 
any  such  franchise  has  a  life  of  not  more  than  one  year  after  the  date 
when  it  is  first  exercised  by  the  corporation,  it  shall  not  be  charged  to 
this  account  but  to  the  appropriate  accounts  in  operating  expenses  (or 
in  Account  No.  13-D,  "Other  Prepayments,"  if  extending  beyond  the 
fiscal  year). 

NOTE. — Payments  made  to  the  State  or  to  some  subdivision  thereof  as  a  consider- 
ation for  granting  an  extension  for  more  than  one  year  of  the  life  period  of  a 
franchise  are  classed  as  renewals.  Those  made  as  a  consideration  for  franchises  or 
extensions  thereof  covering  additional  territory  to  be  operated  as  part  of  an  existing 
system  are  classed  as  additions.  If  the  franchises  cover  separate  and  distinct  new 
plants  the  payments  therefor  are  classed  as  original  capital.  Annual  or  more  frequent 
payments  in  respect  of  franchises  must  not  be  charged  to  this  account  but  to  the 
appropriate  tax  or  operating  expense  account. 

C-3.  PATENT  RIGHTS: 

Charge  to  this  account  the  cost  of  all  rights  (having  a  life  of  more 
than  one  year  from  the  date  when  placed  in  service)  acquired  by  the 
corporation  in  or  under  valid  patents  granted  by  the  United  States  to 
inventors  for  inventions  and  discoveries  which  are  necessary  to  the 
economical  conduct  of  the  corporation's  water  operations. 

NOTE. — If  a  patent  right  is  extended  to  cover  a  further  period  of  time  than  that 
covered  by  the  original  grant,  the  cost  of  such  extension  is  classed  as  a  renewal.  A 
patent  right  acquired  for  use  in  an  existing  system  and  necessary  to  the  economical 
operation  thereof  is  classed  as  an  addition. 


CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS.  19 

C-4.  OTHER  INTANGIBLE  CAPITAL: 

Charge  to  this  account  the  cost  of  all  other  intangible  capital  devoted 
to  water  operations.  Entries  of  charges  to  this  account  shall  describe 
the  acquired  property  with  sufficient  particularity  clearly  to  identify  it, 
and  shall  also  show  specifically  the  principal  from  whom  acquired  and 
all  agents  representing  such  principal  in  the  transaction ;  also  the  term 
of  life  of  such  property,  estimated  if  not  known,  and  if  estimated,  the 
facts  upon  which  the  estimate  is  based. 

Class  B  and  C  corporations  may  consolidate  these  four  accounts, 
carrying  one  account,  " Intangible  Capital." 

TANGIBLE    CAPITAL. 
Landed  Capital. 

C-5.  LAND  DEVOTED  TO  WATER  OPERATIONS  : 

Charge  to  this  account  the  cost  of  the  accounting  corporation's  landed 
capital  which  is  devoted  to  water  operations  as  hereinbefore  defined. 
This  includes  land  occupied  by  pumping  plants  and  their  appurtenances 
and  rights  of  way  for  transmission  and  distribution  lines  and  other  pipe 
lines,  where  such  rights  have  lives  in  excess  of  one  year  from  the  date 
when  such  land  is  placed  in  service.  Such  cost  includes,  when  assumed 
or  paid  by  the  purchaser  in  its  own  behalf,  cost  of  registration  of  title, 
cost  of  examination  of  title,  conveyancer 's  and  notary 's  fees,  purchasing 
agent's  commission  or  fees,  or  proportion  of  purchasing  agent's  salary, 
taxes  accrued  to  date  of  transfer  of  title,  and  all  liens  upon  the  title 
acquired;  also  cost  of  obtaining  consents  and  payments  for  abutting 
damages. 

NOTE  A. — Cost  of  buildings  and  other  improvements  must  not  be  included  in  this 
account. 

NOTE  B. — If  at  the  time  of  acquisition  of  an  interest  in  lands  it  extends  to  build- 
ings or  other  improvements  thereon,  which  improvements  are  devoted  by  the  corpora- 
tion to  its  water  operations,  and  the  contract  of  acquisition  does  not  determine  the 
price  of  such  improvements,  they  shall  be  appraised  at  their  fair  cash  value  for  use 
in  such  operations,  and  such  appraised  value  shall  be  charged  to  the  appropriate 
structures  account,  and  excluded  from  the  account  "Land  Devoted  to  Water  Opera- 
tions." If  such  improvements  are  not  devoted  to  water  operations  but  are  devoted 
to  other  operations  or  held  as  investments,  the  cost  (or  appraised  value  if  the  cost 
is  not  determined  in  the  contract  of  acquisition)  shall  be  charged  to  the  appropriate 
investment  account  or  capital  account  for  other  operations.  If  the  improvements  are 
removed  or  wrecked,  the  salvage  (less  the  cost  of  removal  or  wreckage)  shall  be 
excluded  from  the  account  "Land  Devoted  to  Water  Operations."  The  entries  in 
this  account  must  be  made  in  such  wise  as  to  enable  the  corporation  to  show  in  its 
annual  report  to  the  Railroad  Commission  the  subdivision  of  the  cost  of  its  land 
devoted  to  water  operations  Into  the  following: 

Land   occupied   by   Pumping   Plants. 

Land  occupied  by  Reservoirs,   Tank  and   Standpipes. 

Water   Rights. 

Other  Land  Devoted  to  Water  Operations. 

Pumping  Capital. 

C-6.  BUILDINGS,  STRUCTURES,  ETC.: 

Charge  to  this  account  the  cost  of  all  buildings,  structures  and 
improvements  such  as  pumping  stations,  purification  and  reservoir  struc- 
tures, clams  and  ditches,  intake  structure,  steam,  electric  and  gas  pro- 


20  CLASSIFICATION   OP   ACCOUNTS,   WATER   CORPORATIONS. 

duction  structures,  coal  and  other  fuel  sheds,  and  other  storage  buildings 
and  structures,  tanks  and  standpipes,  and  other  buildings  and  struc- 
tures connected  therewith,  and  all  fixtures  attached  to  such  structures 
and  a  permanent  part  thereof— together  with  fences,  walks,  trestles, 
drives,  grading  and  improvements  of  grounds.  Machinery  foundations 
and  settings,  if  designed  as  a  part  of  the  permanent  construction  of  the 
buildings  and  independent  of  their  use  in  connection  with  any  particular 
unit  of  equipment,  shall  be  charged  to  this  account.  If,  however,  such 
foundations  and  settings  are  prepared  especially  for  certain  units  of 
equipment  and  designed  to  last  no  longer  than  such  unit,  the  cost 
thereof  should  be  charged  to  ' '  Pumping  Equipment  Account. ' ? 

NOTE. — The  accounting  corporation  may,  if  it  so  desires,  subdivide  the  accounts 
under  sub-accounts  A,  B,  C,  etc.,  in  order  to  show  the  detail  of  cost  of  various 
buildings  and  structures. 

C-7.  PUMPING  EQUIPMENT: 

Charge  this  account  with  the  cost  of  all  equipment  and  apparatus 
used  in  the  pumping  of  water  and  all  processes  performed  upon  it  at  the 
station  up  to  its  delivery  to  the  transmission  or  distribution  mains. 
This  includes  the  cost  of  steam  engines  and  turbines,  hydraulic  power 
equipment,  electric  prime  movers,  gas  engines  and  turbines,  pumps  and 
pump  equipment,  furnaces,  boilers,  their  foundations  and  settings,  con- 
densers, vacuum  pumps  and  oiling  systems,  power  transmission  equip- 
ment, such  as  shafting,  belting,  rope  and  cable  drives,  gearing,  pulleys, 
etc.,  smokestacks,  feed  pumps,  piping,  valves  and  all  steam,  hydraulic, 
electric  and  gas  power  pumping  equipment,  together  with  necessary 
tools  and  appliances. 

NOTE. — The  accounting  corporation  may,  if  it  so  desires,  subdivide  this  account, 
under  sub-accounts  A,  B,  C,  etc.,  in  order  to  show  the  details  of  cost  of  various 
classes  of  equipment. 

C-8.  COLLECTING  AQUEDUCTS,  INTAKES  AND  SUPPLY  MAINS  : 

Charge  this  account  with  the  cost  of  all  aqueducts,  intake  and  supply 
mains  used  for  gathering  and  collecting  water  and  transmitting  the 
same  from  the  source  of  supply  to  the  pumping  station.  This  includes 
the  cost  of  masonry  and  concrete  aqueducts  and  channels,  wells  and 
casing,  piping  and  conduits,  together  with  the  necessary  bracing, 
digging  and  repaving  in  connection  therewith  and  all  necessary  valves, 
screens,  wet  wells,  gratings,  submerged  and  exposed  cribs,  intake 
towers,  sluice  gates,  etc. 

C-9.  PURIFICATION  SYSTEM: 

Charge  this  account  with  the  cost  of  all  apparatus  and  equipment 
used  for  purification  of  water.  This  includes  settling  basins,  filter 
beds,  mechanical  filters,  and  all  auxiliary  apparatus  for  purifying 
water,  together  with  protecting  structures  erected  in  connection  there- 
with. 


CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS.  21 

C-10.  MISCELLANEOUS  PUMPING  EQUIPMENT: 

Charge  to  this  account  the  cost  of  all  miscellaneous  equipment;  this 
includes  horses,  wagons,  harness,  automobiles,  motorcycles,  bicycles, 
furniture  and  fixtures  (when  not  a  permanent  part  of  buildings,  etc.), 
roads,  trestles,  bridges,  etc. 

Distribution  Capital. 

C-ll.  TRANSMISSION  MAINS: 

Charge  to  this  account  the  cost  of  all  transmission  mains  used  for 
delivering  water  from  the  pumping  station  to  the  distribution  reser- 
voirs or  mains;  this  includes  the  cost  of  all  trenching,  placing  trans- 
mission main  pipe,  special  castings,  lead  packing,  shut-off s,  manholes, 
valves  and  the  cost  of  filling  trenches,  and  restoring  the  surface  of  the 
street  to  its  former  condition  as  required  by  the  municipal  authorities. 

C-12.  DISTRIBUTION  MAINS: 

Charge  to  this  account  the  cost  of  all  distribution  mains  in  place. 
This  includes  all  mains  used  in  the  distribution  of  water  to  the  begin- 
ning of  the  service  connections,  including  the  cost  of  all  trenching, 
placing  distribution  main  pipe,  special  work  and  castings,  lead  packing, 
shut-offs,  manholes,  valves  and  the  filling  of  trenches  and  restoring  the 
surface  of  the  street  to  its  former  condition  as  required  by  the  munici- 
pal authorities. 

C-13.  SERVICES: 

Charge  to  this  account  the  cost  of  corporation's  property  in  services 
in  or  leading  to  the  consumers'  premises.  This  includes  the  cost  of 
material  in  place,  the  cost  of  trenching  for  placing  services,  service 
pipe,  service  boxes,  stopcocks,  etc.,  and  the  cost  of  filling  the  trenches 
and  restoring  the  surface  to  its  proper  condition.  Where  consumers 
are  required  to  pay  part  or  all  of  the  cost  of  services,  only  that  portion 
of  the  cost  not  chargeable  to  the  consumers  is  chargeable  to  this 
account,  and  in  all  cases  where  only  a  portion  of  the  cost  of  service  is 
chargeable  to  this  account  the  entry  shall  show  the  transactions  in  full. 
Where  services  extending  only  from  the  main  to  the  curb  line  or  to 
the  lot  line  are  placed  before  actually  required  for  the  purpose  of  supply- 
ing consumers,  the  entry  of  the  cost  should  show  that  fact.  Such 
services  will  be  required  to  be  separately  reported  to  the  Railroad 
Commissioners,  in  the  annual  report. 

C-14.  HYDRANTS,  FIRE  CISTERNS,  FOUNTAINS,  ETC.: 

Charge  to  this  account  the  corporation's  property  in  all  hydrants, 
fire  cisterns,  basins,  fountains  and  troughs;  this  includes  all  material 
in  place,  the  cost  of  trenching  for  placing  hydrants,  hydrant  connec- 
tions, masonry  and  concrete  in  connection  with  construction  of  basins 


22  CLASSIFICATION"   OF   ACCOUNTS,,    WATER   CORPORATIONS. 

and  cisterns,  and  all  foundations  and  settings  for  fountains  and  troughs 
and  restoring  the  pavement  to  its  original  condition. 

C-15.  METERS: 

Charge  to  this  account  the  cost  of  the  corporation's  property  in  all 
meters  used  in  measuring  water  sold  to  consumers.  This  includes  the 
cost  of  first  setting  of  the  meters,  the  first  set  of  meter  fittings,  and  con- 
nections in  the  premises  of  the  consumer,  or  such  portion  of  the  cost  as 
is  borne  by  the  corporation.  The  cost  of  changing  the  position  of  the 
meter  or  its  removal  should  not  be  charged  to  this  account. 

C-16.  MISCELLANEOUS  DISTRIBUTION   EQUIPMENT: 

Charge  to  this  account  the  cost  of  all  miscellaneous  equipment  used 
in  the  distribution  of  water  and  which  is  not  includible  in  the  fore- 
going accounts.  This  includes  tools  and  appliances,  (working  stock 
only)  horses,  wagons,  harness,  automobiles,  motorcycles,  bicycles,  furni- 
ture and  fixtures  (when  not  a  permanent  part  of  buildings,  etc.),  roads, 
trestles  and  bridges,  etc.,  where  a  part  of  the  distribution  system. 

General  Capital. 

C-17.  GENERAL  STRUCTURES: 

Charge  to  this  account  the  cost  of  all  buildings  and  other  structures 
of  a  permanent  character  devoted  to  general  corporate  purposes,  not 
restricted  to  water  operations  and  not  includible  in  any  of  the  depart- 
mental accounts ;  also  of  all  fixtures  permanently  attached  thereto  and 
made  a  part  thereof,  such  as  water  pipes  and  fixtures,  steam  pipes 
and  fixtures  for  warming  and  ventilating,  gas  pipes  and  fixtures  for 
lighting,  etc.,  electric  wiring  and  fixtures  for  lighting,  signaling,  etc. ; 
elevators,  etc. ;  and  the  engines  and  motors  specially  provided  for 
operating  them ;  furnaces,  boilers,  etc.,  specially  provided  for  produc- 
ing steam  for  such  engines  and  for  heating ;  electric  generators  specially 
provided  for  producing  current  for  lighting  such  buildings,  etc.  This 
account  includes  such  piers  and  other  foundations  for  machinery  and 
apparatus  as  are  designed  to  be  as  permanent  as  the  buildings  in  (or 
in  connection  with)  which  they  are  constructed,  and  to  outlast  the  first 
machinery  or  apparatus  mounted  thereon. 

NOTE  A. — Among  such  buildings  may  be  mentioned  general  office  buildings,  general 
shop  buildings,  general  storehouses,  general  stable  buildings,  etc. 

NOTE  B. — When  furnaces  and  boilers  are  used  primarily  for  furnishing  steam  for 
some  particular  department  and  only  incidentally  for  furnishing  steam  for  heating  a 
general  building  and  operating  the  equipment  therein,  the  entire  cost  of  such  furnaces 
and  boilers  shall  be  charged  to  the  appropriate  departmental  capital  account,  and 
no  part  to  the  account,  "General  Structures." 

NOTE  C. — The  cost  of  specially  provided  foundations,  not  expected  to  outlast  the 
machinery  or  apparatus  mounted  thereon,  should  be  charged  to  the  same  account 
as  is  the  cost  of  the  machinery  or  apparatus  for  which  they  are  provided. 


CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS.  23 

C-18.  GENERAL  EQUIPMENT  : 

Charge  to  this  account  the  cost  of  all  equipment  of  general  structures, 
as  provided  under  the  following  heads : 

A.  General  Office  Equipment.     This  includes  the  cost  of  all  equip- 
ment of  general  offices,  such  as  desks,  chairs,  tables,  movable  safes,  filing 
cases,  drafting-room  equipment,  and  other  like  office  appliances  and 
equipment ;  also  engineering  instruments. 

B.  General  Shop  Equipment.     This  includes  the  cost  of  all  equip- 
ment specially  provided  for  general  shops,  such  as  furnaces,  boilers,  gas 
producers,  engines,  electric  generators,  and  other  power  apparatus  used 
in  operating  machinery  in  such  shops;  machine  tools,  cranes,  hoists, 
shafting,  belts  and  the  like  shop  equipment;  also  such  smithing  equip- 
ment in  general  shops  as  is  used  principally  for  other  general  purposes 
than  shoeing  horses  and  repairing  vehicles. 

NOTE. — Hand  and  other  small  portable  tools  liable  to  be  lost  or  stolen  shall  not 
Tse  included  herein,  but  portable  tools  and  apparatus  of  special  value  may  be  charged 
to  this  account  and  remain  herein  so  long  as  record  is  kept  of  the  persons  to  whom 
such  tools  and  apparatus  are  issued  and  such  persons  are  made  responsible  therefor. 

C.  General  Store  Equipment.     This  includes  the  cost  of  all  equip- 
ment of  general  store  structures,  such  as  movable  counters,  movable 
shelving,  and  other  movable  equipment  of  like  nature,  carts,  barrows, 
trucks,   etc..   and  other   apparatus  and  appliances  used  in  handling 
materials  and  supplies. 

NOTE. — Counters,  shelving  and  the  like  which  are  permanently  attached  to  the 
structure  shall  be  charged  to  Account  No.  C-17,  "General  Structures,"  and  not  to 
"this  account. 

D.  General  Stable  and  Garage  Equipment.     This  includes  the  cost 
<>f  ;ill  equipment  of  general  stables  and  garages  including  horses,  har- 
ncs<.    drays,    wagons,    automobiles   and   other   vehicles,    equipment   of 
shoeing  shops,  harness  repair  shops,  vehicle  repair  shops,  etc. 

C-19.  UNDISTRIBUTED  CONSTRUCTION  EXPENDITURES: 

This  account  includes  the  expenditures  provided  for  in  the  following 
sub-accounts,  when  such  expenditures  cannot  be  satisfactorily  allocated 
to  the  fixed  capital  accounts  to  which  they  relate.  Upon  the  retirement 
or  withdrawal  of  any  property  with  respect  to  which  any  charge  is 
included  in  this  account  or  any  sub-account  hereunder,  there  shall  be 
credited  to  this  account  or  the  appropriate  sub-account  such  part  of  the 
undistributed  expenditures  during  construction  (estimated  if  not 
known)  as  may  be  applicable  to  the  property  withdrawn  or  retired. 

A.  Engineering  and  Superintendence.  Charge  to  this  account  all 
expenditures  for  services  of  engineers,  draftsmen  and  superintendents 
employed  on  preliminary  and  construction  work,  and  expense?  incident 
to  teh  work  of  such  employees  when  the  expenditures  can  not  be 
-assigned  to  specific  construction  accounts. 


24  CLASSIFICATION   OP   ACCOUNTS,   WATER   CORPORATIONS. 

B.  Law  Expenditures  During  Construction.     Charge  to  this  account 
general  law  expenditures  incurred  in  the  construction  of  the  water  plant, 
such  as  the  pay  and  expenses  of  counsel,  solicitors  and  attorneys,  their 
clerks  and  attendants,  and  expenses  of  their  offices ;  the  cost  of  printing 
briefs,  legal  f orms,  testimony,  reports,  etc. ;  payments  to  arbitrators  for 
the  settlement  of  disputed  questions;  cost  of  suits  and  payments  of 
special  fees,  notarial  fees  and  witness  fees,  and  court  expenses.    When 
any  of  the  expenditures  enumerated  herein  can  be  charged  directly  ta 
the  account  for  which  incurred,  they  shall  be  so  charged,  and  not  to  this 
account.     Law  expenditures  in  connection  with  the  organization  of  the 
corporatibn  shall  be  charged  to  Account  No.  1,  "Organization." 

C.  Injuries   and   Damages   During    Construction.     Charge    to    this 
account  all  damage  to  or  destruction  of  property  other  than  that  owned 
by  the  corporation,  caused  directly  in  connection  with  the  construction 
of  the  works,  all  expenses  incident  to  injuries  or  death  of  employees  and 
other  persons  for  which  the  corporation  is  held  liable.     This  includes 
such  expenses  as  judgments,  court  costs,  salaries  and  expenses,  or  fees  of 
physicians,   surgeons,   expenses   of  undertakers,   nurses,   and  hospital 
expenses,  medical  and  surgical  supplies,  contribution  to  hospitals  during- 
the  period  of  construction  of  the  plant,  transportation  of  injured  per- 
sons, salaries  paid  to  employees  while  disabled,  the  salaries  and  expenses 
of  claim  agents,  adjusters,  and  their  assistants.     The  compensation  of 
the  general  solicitors  or  counseLof  the  corporation  while  engaged  in  the 
defense  and  settlement  of  damage  or  injury  sustained  will  also  be 
charged  to  this  account. 

D.  Taxes  During  Construction.     Charge  to  this  account  all  taxes  and 
assessments  levied  and  paid  on  property  belonging  to  the  corporation 
while  under  construction  and  before  the  plant  is  opened  for  operation, 
except  special  taxes  assessed  for  street  and  other  improvements,  such 
as  grading,  sewering,  curbing,  guttering,  paving,  sidewalks,  etc.,  which 
shall  be  charged  to  the  account  to  which  the  property  benefited  is 
charged. 

E.  Miscellaneous  Construction  Expenditures.     Charge  to  this  account, 
salaries  and  expenses  of  executive  and  general  officers  of  the  corporation 
before  it  is  ready  to  begin  operations ;  clerks  in  general  offices  engaged 
on  construction  accounts  or  work;  rent  and  repair  of  general  offices 
when  rented,  with  the  office  expenses;  insurance  during  construction; 
also  construction  and  equipment  items  of  a  special  and  incidental  nature 
which  can  not  properly  be  charged  to  any  other  fixed  capital  account. 

NOTE  A. — This  account  may  include  a  suitable  proportion  of  store  expenses  when 
such  expenses  are  not  assignable  to  specific  materials. 

NOTE  B. — This  account  shall  not  include  any  costs  of  organization,  or  any  costs 
or  discounts  connected  with  the  issue  and  disposal  of  stocks,  bonds,  or  other  securi- 
ties, or  commercial  paper. 


CLASSIFICATION  OF  ACCOUNTS,  WATER  CORPORATIONS.          .    25 

€-20.  INTEREST  DURING  CONSTRUCTION: 

Charge  to  this  account  the  interest  accrued  upon  all  moneys  (and 
credits  available  upon  demand)  acquired  for  use  in  connection  with 
the  construction  and  equipment  of  the  property  from  the  time  of  such 
acquisition  until  the  construction  is  ready  for  use.  Interest  receivable 
accrued  upon  such  moneys  and  credits  shall  be  credited  to  this  account. 
€redit  to  this  account  also  discount  realized  through  prompt  payment 
of  bills  for  materials  and  supplies  used  in  construction,  unless  such 
•discounts  are  credited  to  the  bills  to  which  they  apply. 

If  any  property  with  respect  to  which  an  interest  is  included  in  this 
account  is  withdrawn  or  retired  from  service,  the  amount  of  such 
interest  (estimated  if  not  known)  shall  be  credited  to  this  account  and 
charged  off  as  part  of  the  original  cost  of  the  property  so  retired.  No 
interest  upon  expenditures  for  replacements,  renewals,  or  reconstruction 
shall  be  included  in  this  or  any  other  fixed  capital  account  unless  proper 
credits  are  made  to  the  appropriate  fixed  capital  accounts  for  any 
interest  included  in  such  accounts  in  respect  of  property  retired  or 
withdrawn. 

€-21.  COST  OF  PLANT  PURCHASED  IN  LIEU  OF  PLANT  CONSTRUCTED: 
Charge  to  this  account  the  cost  of  the  waterworks  purchased  in  case 

the  plant  of  the  corporation  is  obtained  by  purchase  instead  of  being 

•constructed  by  it. 

The  entry  to  this  account  should  show  with  sufficient  detail  the  name 

of  the  parties  from  whom  purchased,  the  purchase  price  and  other 

facts  pertinent  to  such  sale.    All  books  and  records  should  be  retained 

at  time  of  purchase.     The  Railroad  Commission  will  require  full  and 

complete  details  of  all  transaction  of  purchase. 

C-22.  FIXED  CAPITAL  IN  OTHER  DEPARTMENTS: 

charge  to  this  account  the  cost  of  all  property  of  the  corporation, 
both  tangible  and  intangible,  devoted  to  its  operations  other  than  water, 
not  including  investments  as  defined  in  Account  No.  8,  "Investments." 
C-23.  FIXED  CAPITAL  INSTALLED  PRIOR  TO  JANUARY  1,  1913 : 

In  this  account  (on  the  balance  sheet  statement)  shall  be  shown  the 
total  of  the  balances  in  the  ledger  accounts  representing  the  corpora- 
tion's fixed  capital  which  was  installed  prior  to  January  1,  1913,  and 
which  is  still  in  service  at  the  date  of  the  balance  sheet. 

The  accounts  representing  the  fixed  capital  of  the  corporation  as 
carried  on  its  books  at  the  close  of  December  31,  1912,  shall  be  so 
designated  upon  the  books  of  the  corporation  as  to  show  clearly  that 
they  relate  only  to  fixed  capital  installed  prior  to  the  close  of  that  date. 
!No  debits  shall  be  made  to  such  accounts  with  respect  to  any  property 


26      •  CLASSIFICATION   OF   ACCOUNTS.   WATER   CORPORATIONS. 

subsequently  acquired,  but  the  cost  of  such  property  shall  be  charged 
to  the  accounts  hereinbefore  provided.  When  any  property  acquired 
prior  to  January  1,  1913,  is  withdrawn  or  retired  from  service,  the 
amount  at  which  it  stands  charged  shall  be  credited  to  the  account  in 
which  it  is  charged  and  concurrent  debits  shall  be  made  (1)  to  "Cash." 
"Materials  and  Supplies,"  or  other  account,  as  may  be  appropriate, 
for  the  value  of  any  salvage;  (2)  to  Account  No.  29,  ''Reserve  for 
Accrued  Depreciation."  or  to  Account  No.  30,  "Reserve  for  Amortiza- 
tion of  Intangible  Capital,"  for  the  amount  of  depreciation  or  other 
amortization  applicable  to  the  period  subsequent  to  December  31,  1912 ; 
and  (3)  to  "Corporate  Surplus  or  Deficit  account"  for  the  remainder 
of  the  amount  at  which  the  property  is  carried  in  the  accounts  for  fixed 
capital;  unless  the  corporation  had  on  that  date  a  reserve  for  retire- 
ments, in  which  case  the  latter  amount,  or  so  much  of  it  as  may  be 
applicable,  shall  be  charged  to  such  reserve  account. 

NOTE. — In  the  reports  to  the  Railroad  Commission,  a  statement  will  be  required 
showing  the  names  of  the  accounts  for  fixed  capital  actually  carried  by  the  corpora- 
tion on  December  31,  1912,  and  the  balances  therein  at  the  date  of  the  report. 

C-24.  FIXED  CAPITAL  INSTALLED  SINCE  DECEMBER  31,  1912 : 

This  account  is  a  summary  of  the  accounts  representing  the  corpora- 
tion's fixed  capital  since  December  31.  1912,  and  should  show  the  cost 
of  the  fixed  capital  which  has  been  installed  since  that  date  and  is  still  in 
service  at  the  date  of  the  balance  sheet.  (For  the  primary  Fixed 
Capital  accounts,  see  Account  C-l  to  C-4,  "Intangible  Capital,"  and 
Accounts  C-5  to  C-23,  "Tangible  Capital.") 

INCOME    ACCOUNT. 

INCOME  ACCOUNT  DEFINED  : 

The  income  account  brings  together  those  accounts  that  show  the  total 
amount  of  money  that  the  corporation  has  received  or  becomes  entitled 
to  receive  for  services  rendered  during  a  given  period,  the  return  accru- 
ing during  the  period  upon  investments,  and  the  disbursements  and  obli- 
gations incurred  that  affect  the  disposition  of  the  amounts  so  received  or 
accrued.  The  following  accounts  make  up  the  income  account  statement 
and  should  be  closed  into  the  Income  Account  at  the  close  of  the  year  or 
other  fiscal  period. 

101.  OPERATING  REVENUES  : 

Include  in  this  account  the  total  operating  revenues  of  the  corporation 
for  the  period  covered  by  the  income  statement.  See  Accounts  R-l  to 
R-9,  inclusive,  under  "Operating  Revenue." 

102.  OPERATING  EXPENSES  : 

Include  in  this  account  the  total  operating  expenses  of  the  corpora- 
tion for  the  period  covered  by  the  income  statement.  (See  Accounts- 
E-l  to  E-52.  inclusive,  under  "Operating  Expenses.") 


CLASSIFICATION"  OF  ACCOUNTS,  WATER  CORPORATIONS.  27 

103.  UNCOLLECTIBLE  WATER  BILLS: 

Charge  to  this  account  (and  credit  the  account  receivable  in  which 
theretofore  carried)  the  amount  of  any  account  for  water  services  which, 
after  a  reasonably  diligent  effort  to  collect,  has  proved  impracticable  of 
collection.  This  account  includes  only  uncollectible  bills  for  amounts 
which  have  been  treated  as  operating  revenues ;  other  uncollectible  bills 
should  be  charged  to  Account  No.  105-G,  "Uncollectible  Non-operating 
Revenues,"  or  to  Corporate  Surplus  or  Deficit  Account,  as  may  be 
appropriate. 

104.  NON-OPERATING  REVENUES  : 

A.  Rents  from  Buildings,   Land   and  Apparatus.     Credit   to   this 
account  as  it  accrues  rent  from  the  rental  of  buildings,  land  and  water 
apparatus  and  appliances.     Where  the  contract  of  rental  includes  the 
setting  and  connection  of  such  apparatus  and  also  its  maintenance  by 
the  corporation,  the  total  earnings  from  such  rental  shall  be  credited  to 
this  account. 

B.  Interest  and  Dividend  Revenues.     Credit  to  this  account  monthly 
all  revenues  accruing  to  the  corporation,  not  retained  in  specific  sinking 
or  other  reserve  funds,  from  interest  upon  all  its  bank  balances,  special 
deposits,  and  other  assets,  when  such  interest  is  a  liability  of  solvent 
concerns  or  individuals,  and  from  dividends  declared  or  guaranteed  by 
solvent  concerns  upon  stocks  held  by  the  corporation.     No  interest  or 
dividends  upon  securities  issued  or  assumed  by  the  accounting  corpora- 
tion shall  be  credited  to  this  account  nor  to  any  other  revenue  account. 

Class  A  corporations  will  subdivide  the  revenue  included  herein  and 
keep  separate  accounts  for — 

a.  Interest  Revenues  on  Funded  Debt  owned. 
6.  Miscellaneous  Interest  Revenues. 
c.  Dividend  Revenues. 

C.  Sinking  and  Other  Reserve  Fund  Accretions.     Credit  to  this 
account  and  charge  the  appropriate  fund  or  its  trustee  monthly  the 
revenues  accruing  from  securities  and  other  assets  in  the  hands  of  trus- 
tees or  specifically  set  aside  for  sinking  and  other  special  funds,  when 
the  revenues  are  retained  as  a  part  of  the  funds.     Such  revenues  may 
include  appropriations  equal  to  interest  upon  securities  issued  or  as- 
sumed by  the  accounting  corporation  where  such  securities  are  acquired 
through  the  operation  of  a  sinking  or  other  reserve  fund. 

NOTE. — If  the  assets  of  a  fund  are  to  be  represented  by  a  reserve  from  surplus, 
concurrent  entries  should  be  made  charging  Account  No.  113,  "Sinking  Fund  Appro- 
priation," or  Account  No.  114— E  "Appropriations  to  Reserves,"  crediting  Account  No. 
34,  "Reserves  Invested  in  Sinking  Funds,"  or  No.  35,  "Other  Reserves  from  Income 
or  Surplus,"  as  may  be  appropriate. 

D.  Profits  from  Operations  of  Others.     Whenever  in  accordance  with 
the  terms  of  any  contract  the  corporation  is  entitled  to  participate  in  the 


28  CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS. 

profits  from  operations  of  others,  all  revenues  accruing  to  the  corpora- 
tion from  such  source  shall  be  credited  to  this  account. 

XOTE. — This  account  does  not  include  any  dividends  on  stocks  nor  any  remunera- 
tion for  services. 

E.  Miscellaneous  Non-operating  Revenues.     Credit  to  this  account  all 
non-operating  revenues  not  provided  for  in  the  foregoing  accounts. 

105.  NON-OPERATING  REVENUE  DEDUCTIONS  : 

A.  Rent  Expenses.     Charge  to  this  account  all  expenses  arising  in 
connection  with  the  procuring  of  revenues  from  rented  property,  such  as 
the  cost  of  negotiating  contracts,  advertising  for  tenants,  fees  paid  con- 
veyancers, collector's  commissions,  cost  of  enforcing  payment  of  rent, 
cost  of  ousting  tenants,  etc.    This  includes  the  expenses  accruing  while 
the  property  is  idle  and  awaiting  an  occupant ;  also  the  cost  of  mainte- 
nance of  the  property  when  such  cost  is  borne  by  the  corporation.    Such 
maintenance  includes  depreciation  as  well  as  reparable  wear  and  tear. 
It  does  not  include  taxes. 

B.  Interest  Expenses.     Charge  to  this  account  all  expense  arising  in 
connection  with  procuring  interest  upon  investments,  such  as  expense 
of  collection,  expense  of  investigating  delay  in  payment,  expense  of 
enforcing  payment,  and  the  like.     It  does  not  include  taxes  on  such 
investments. 

C.  Dividend  Expenses.     Charge  to  this  account  all  expense  arising 
in  connection  with  the  collection  of  dividends  on  stocks  of  other  corpor- 
ations, including  expenses  incurred  in  the  investigation  of  the  affairs 
of  the  corporations  whose  stocks  are  held,  whether  for  the  purpose  of 
detecting  mismanagement  or  for  the  purpose  of  inducing  the  declara- 
tion of  dividends,  and  all  expense  connected  with  enforcing  payment 
of    dividends    when    declared.     It    does    not    include    taxes    on    such 
investments.  . . 

D.  Others'  Operations  Expenses.     Charge  to  this  account  the  cost 
of  negotiating  contracts  whereunder  the  corporation  is  to  participate 
in  the  profit  resulting  from  the  operations  of  others;  also  all  expense 
of  collecting  the   corporation's  proportion   of  such  profits,   and   all 
expense  connected  with  procuring  the  modification  or  the  dissolution 
of  any  such  contract. 

E.  Miscellaneous  Non-operating  Expenses.     Charge  to  this  account  all 
non-operating  expense  not  provided  for  in  the  foregoing  sub-accounts. 

F.  Non-operating  Taxes.     Charge  to  this  account  all  taxes  payable 
by  the  corporation  accrued  upon  non-operating  property,  and  all  taxes 
assignable  to  non-operating  revenues. 

G.  Uncollectible  Non-operating  Revenues.     When  any  non-operating 
revenues  are  judged  by  the  corporation  to  be  uncollectible,  the  amount 
thereof  shall  be  credited  to  the  account  in  which  theretofore  charged  and 
charged  to  this  account. 


CLASSIFICATION  OF  ACCOUNTS,  WATER  CORPORATIONS.  29 

106.  INTEREST  ACCRUED  ON  FUNDED  DEBT  : 

Charge  to  this  account  monthly  all  interest  accrued  on  outstanding 
funded  debt  issued  or  assumed  by  the  corporation.  This  account  does 
not  include  interest  on  securities  held  by  the  corporation  in  its  treasury, 
in  sinking  or  other  reserve  funds,  or  pledged  as  collateral. 

NOTE  A. — The  amount  charged  to  this  account  shall  be  concurrently  credited  to 
Account  No.  25,  "Interest  Accrued,"  to  which  account  shall  be  debited  payments 
made  on  account  of  interest. 

NOTE  B. — If  any  of  the  funded  debt  securities  issued  or  assumed  by  the  corpora- 
tion are  held  in  its  sinking  or  other  reserve  funds  and  the  interest  on  such  funded 
debt  is  an  accretion  to  the  fund,  the  interest  on  such  securities  shall  not  be  charged 
to  this  account  but  an  amount  equal  to  the  interest  on  the  funded  debt  so  held  shall 
be  charged  to  Account  No.  113,  "Sinking  Fund  Appropriations."  This  does  not  apply 
to  securities  in  funds  held  in  trust  by  the  corporation,  such  as  employees'  pension 
funds  and  savings  funds. 

107.  OTHER  INTEREST  DEDUCTIONS  : 

Charge  to  this  account  monthly  all  interest  accrued  on  receivers'  certi- 
ficates and  on  interest  bearing  unfunded  obligations  of  the  corporation. 

NOTE  A. — The  amount  charged  to  this  account  shall  be  concurrently  credited  to 
Account  No.  25,  "Interest  Accrued,"  or  to  No.  21,  "Receivers'  Certificates,"  to  which 
accounts  shall  be  debited  payments  made  on  account  of  such  interest. 

108.  RENT  DEDUCTIONS: 

Charge  to  this  account  monthly  all  amounts  accrued  against  the  cor- 
poration for  rents,  other  than  minor  rents  provided  for  elsewhere  as 
chargeable  to  operating  expenses.  It  includes  the  matters  provided  for 
in  the  following  sub-accounts: 

A.  Rent  for  Lease  of  Other  Water  Plant.     Charge  to  this  account 
monthly  all  amounts  accrued  against  the  corporation  for  rent  of  water 
plant  and  equipment  which  it  holds  under  some  form  of  lease  from 
another,  and  of  which  it  has  the  exclusive  possession. 

This  account  is  intended  to  cover  only  rents  payable  for  the  use  of 
water  plant  or  operating  units  held  as  a  whole  under  some  form  of  lease. 

B.  Miscellaneous  Rent  Deductions.     Charge  to  this  account  rents  pay- 
able accrued  not  provided  for  elsewhere. 

109.  AMORTIZATION  OF  DEBT  DISCOUNT  AND  EXPENSE  : 

Charge  to  this  account  at  or  before  the  close  of  any  fiscal  period  that 
proportion  of  the  unamortized  discount  and  expense  on  outstanding  debt 
which  is  applicable  to  the  period.  This  proportion  shall  be  determined 
according  to  a  rule,  the  uniform  application  of  which  during  the  interval 
between  the  issue  and  the  maturity  of  any  debt  will  completely  amortize 
or  wipe  out  the  discount  at  which  such  debt  was  issued  and  the  debt 
expense  connected  therewith.  Such  amortization  may  at  the  option  of 
the  corporation  be  earlier  affected  by  charging  all  or  any  portion  of  such 
discount  and  debt  expense  to  Account  No.  114— G,  "Other  Deductions 
from  Surplus, ' '  immediately  upon  issue  of  the  debt  or  thereafter. 


30  CLASSIFICATION    OF   ACCOUNTS.   WATER    CORPORATIONS. 

110.  AMORTIZATION  OF  PREMIUM  ON  DEBT — CR.  : 

Credit  this  account  at  or  after  the  close  of  any  fiscal  period  the  pro- 
portion of  the  premium  at  which  outstanding  debt  was  issued  which  is 
applicable  to  the  period.  This  proportion  shall  be  determined  according 
to  a  rule,  the  uniform  application  of  which  during  the  interval  between 
the  issue  and  the  maturity  of  any  debt  will  completely  amortize  or  wipe 
out  the  premium  at  which  such  debt  was  issued. 

111.  MISCELLANEOUS  DEDUCTIONS  FROM  INCOME  : 

Charge  to  this  account  the  matters  provided  for  in  the  following  sub- 
accounts  : 

A.  Loss  on  Operations  of  Others.     Whenever,  in  accordance  with  the 
terms  of  any  contract,  the  corporation  is  bound  to  contribute  toward 
reimbursement  of  the  losses  resulting  from  the  operations  of  others,  all 
liabilities  accruing  to  the  corporation  from  such  source  shall  be  charged 
to  this  account. 

B.  Amortization  of  Landed  Capital.     Charge  to  this  account  at  the 
close  of  any  fiscal  period  such  portion  of  the  original  money  cost  (esti- 
mated if  not  known)  of  landed  capital  as  is  necessary  to  cover  the  pro- 
portion of  the  life  thereof  expired  during  such  period. 

NOTE  A. — The  amounts  charged  to  this  account  shall  be  concurrently  credited  to 
Account  No.  30,  "Reserve  for  Amortization  of  Intangible  Capital." 

NOTE  B. — When  any  landed  capital  expires  or  is  otherwise  retired  from  service 
(as,  e.  g.,  through  sale)  the  capital  account  or  investment  account  (if  any)  originally 
charged  therewith  shall  be  credited  with  the  amount  originally  charged ;  Account  No. 
30,  "Reserve  for  Amortization  of  Intangible  Capital,"  shall  be  debited  with  all 
amounts  theretofore  credited  to  such  account  in  respect  of  such  landed  capital  so 
going  out  of  service,  the  appropriate  account  shall  be  debited  witn  the  proceeds  of 
sale  (if  any),  and  any  necessary  adjustment  shall  be  made  through  the  "Corporate 
Surplus  or  Deficit"  account. 

C.  Other  Contractual  Deductions  from  Income.     Charge  to  this  ac- 
count all  deductions  from  gross  income  which  are  in  the  nature  of  fixed 
charges  and  not  provided  for  otherwise,  such  as  those  required  by  the 
terms  of  some  contract,  agreement,  charter  provision,  law,  or  ordinance. 
Such  deductions  should  not  include  any  appropriations  or  dispositions 
of  income  that  rest  solely  in  the  discretion  of  the  accounting  corporation. 

NOTE. — Payments  to  sinking  funds  shall  not  be  charged  to  this  account  but  shall 
be  included  in  Account  No.  113,  "Sinking  Fund  Appropriations." 

CORPORATE    SURPLUS    OR    DEFICIT    ACCOUNT. 

CORPORATE  SURPLUS  OR  DEFICIT  ACCOUNT  DEFINED  : 

This  account  or  summary  is  the  connecting  link  between  the  income 
account  and  the  balance  sheet.  It  summarizes  the  changes  in  the  cor- 
porate surplus  or  deficit  during  a  given  fiscal  period  resulting  from  the 
business  transactions  during  that  period  as  well  as  those  affected  by 
any  disposition  of  net  profits  made  solely  at  the  option  of  the  corpora- 
tion, by  accounting  adjustments  not  properly  attributable  to  the  period, 
or  by  miscellaneous  losses  or  gains  not  provided  for  elsewhere. 


CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS.  31 

To  this  account  should  be  carried  the  net  balance  of  the  accounts- 
forming  the  Income  account,  and  in  it  should  be  summarized  all 
optional  appropriations  (including  dividends)  ;  miscellaneous  adjust- 
ments due  to  errors  in  accounting  in  prior  fiscal  periods;  profits  from 
the  sale  of  securities  or  other  property;  losses  upon  property  sold  or 
otherwise  retired  and  not  covered  by  reserves,  and  unusual  losses  and 
gains  of  like  nature.  For  these  matters  the  following  accounts  are 
provided;  their  net  balance  added  to  the  net  balance  from  the  Income 
account  should  show  the  net  surplus  or  deficit  on  the  date  of  the  balance 
sheet. 

112.  DIVIDENDS  ON  OUTSTANDING  STOCK: 

When  any  dividend  is  declared  upon  any  outstanding  stocks  of  the 
corporation,  the  amount  of  such  dividend  shall  thereupon  be  charged 
to  this  account.  All  entries  to  this  account  shall  show  the  amount  of 
stock  upon  which  the  dividend  is  declared  as  well  as  the  amount  thereof. 
If  the  dividend  is  payable  in  anything  other  than  money,  such  thing 
shall  be  described  in  the  entry  with  sufficient  particularity  to  identify 
it,  and  the  actual  money  value  thereof  shall  be  stated  as  the  amount  of 
the  dividend. 

When  any  dividend  is  declared  upon  the  stocks  of  the  corporation 
owned  by  or  held  in  behalf  of  the  corporation,  the  amount  of  such 
dividend  thereon  shall  be  credited  to  this  account.  Entries  of  credits- 
to  this  account  shall  be  made  with  the  same  degree  of  particularity  as 
is  prescribed  in  the  preceding  paragraph. 

113.  SINKING  FUND  APPROPRIATIONS: 

Charge  to  this  account  all  appropriations  to  sinking  funds  and  accre- 
tions to  such  funds  on  account  of  income  from  previous  investments. 
Such  appropriations  should  include:  (1)  direct  payments;  (2)  sums 
equal  to  the  interest  or  dividends  on  securities  issued  or  assumed  by 
the  corporation  and  held  in  sinking  funds;  (3)  income  from  invest- 
ments of  sinking  funds  other  than  securities  issued  or  assumed :  (4)  in- 
come from  cash  or  special  deposits  held  by  trustees  of  sinking  funds. 
All  earnings  of  sinking  funds  and  contributions  to  such  funds  shall  be 
included  in  this  account  whether  such  contributions  are  made  at  the 
option  of  the  corporation  or  are  required  by  the  provisions  of  mort- 
gages, deeds  of  trust,  or  other  contracts. 

114.  MISCELLANEOUS  DEDUCTIONS  FROM  SURPLUS: 

A.  Expenses  Unprovided  for  Elsewhere.  Charge  to  this  account  all 
expenses  not  chargeable  as  a  part  of  operating  expenses  or  of  non- 
operating  expenses,  such  as  fines  levied  on  the  corporation  for  violation 
of  law.  for  misfeasance,  etc.,  fines  levied  on  directors,  officers,  and  other 
employees  of  the  corporation  and  assumed  by  it,  donations  to  funds,  ta 
churches  and  other  associations,  and  other  like  expenses  and  outgoes. 


32  CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS. 

B.  Realized  Depreciation  Not  Covered  by  Reserves.     Charge  to  this 
account  the  realized  depreciation  (that  is,  the  difference  between  the 
original  cost  and  the  salvage,  if  any)  on  tangible  capital  retired,  when 
such  depreciation  has  not  been  provided  for  through  a  depreciation 
reserve.     This  includes  such  portion  of  the  realized  depreciation  on 
.any  physical  property  which  was  installed  prior  to  the  creation  of  the 
reserve  for  accrued  depreciation  as  is  due  to  life  in  service  before  that 
•date;  this  portion  may  be  estimated  on  the  basis  of  the  proportion 
which  the  life  in  service  of  the  property  in  question  prior  to  the 
-establishment  of  the  reserve  bears  to  its  entire  life  in  service. 

C.  Amortization  'Unprovided  for  Elsewhere.     Charge  to  this  account 
when  any  intangible  property  expires  or  is  relinquished,  such  portion 
of  its  cost  as  has  not  been  previously  written  off  or  is  not  covered  by 
Account  Xo.  30.  "Reserve  for  Amortization  of  Intangible  Capital." 
Charge  also  to  this  account  all  optional  amortization,  such  as  that  of 
organization  expenses,  and  assets,  carried  in  Account  No.  C-4,  "Other 
Intangible  Capital." 

D.  Gifts  to  Controlled  Corporations.     Charge  to  this  account  all  gifts 
made  by  the  corporation  to  its  controlled  corporations,  also  such  por- 
tions of  all  advances  thereto  as  are  not  carried  as  assets. 

E.  Appropriations  to  Reserves.     Charge  to  this  account  all  optional 
-appropriations  to  reserves. 

F.  Other  Appropriations  from  Surplus.     Charge  to  this  account  all 
optional  appropriations  made  by  the  corporation  and  not  provided 
for  elsewhere. 

NOTE. — A  complete  analysis  of  this  account  will  be  required  in  annual  reports  of 
•corporations  to  the  Railroad  Commission. 

G.  Other  Deductions  from  Surplus.    Charge  to  this  account  all  deduc- 
tions from  surplus  made  to  extinguish  discount  on  stocks  outstanding, 
optional  amortization  of  debt  discount  and  expense,  deductions  because 
of  erroneous  accounting  in  prior  fiscal  periods,  and  all  other  deductions 
from  surplus  not  provided  for  elsewhere. 

NOTE. — A  complete  analysis  of  this  account  will  be  required  in  annual  reports  of 
•corporations  to  the  Railroad  Commission. 

115.  MISCELLANEOUS  ADDITIONS  TO   SURPLUS  : 

Credit  to  this  account  all  additions  to  surplus  due  to  erroneous 
accounting  in  previous  fiscal  periods,  bad  debts  collected  after  being 
written  off,  profits  arising  from  the  sale  of  securities  or  other  property, 
<etc. 

OPERATING   REVENUES— WATER. 

EXPLANATION  : 

Revenue  defined.  By  revenues,  as  the  word  is  used  herein,  are  meant 
all  amounts  of  money  which  the  corporation  receives  or  becomes  law- 
fully entitled  to  recover  for  services  rendered,  for  products  sold,  as 


CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS.  33 

gross  profits  on  merchandise  sold,  or  as  a  return  upon  its  property  (or 
interest  in  property).    Eevenues  are  classified  as  OPERATING  REVENUES- 

and   NON-OPERATING  REVENUES. 

Operating  revenues  defined.  Operating  revenues  are  those  derived 
from  the  sale  of  products  and  merchandise,  from  services  rendered,, 
and  from  return  on  property  used  by  the  person  or  corporation  in  its 
own  operations. 

yon-operating  revenues  defined.  Non-operating  revenues  are  those 
derived  as  a  return  upon  the  property  of  the  corporation  in  the  hands 
of  others  or  from  its  interests  in  property  in  the  hands  of  others.  They 
may  be  sub-classified  as  RENTS,  INTEREST,  DIVIDENDS,  and  MISCELLANEOUS* 

Revenue  deductions  defined.  Revenue  deductions  include  EXPENSES,- 
TAXES,  and  UNCOLLECTIBLE  BILLS. 

R-l.  EARNINGS  FROM   COMMERCIAL  SALES: 

Credit  this  account  with  all  revenue  from  water  sales  to  commercial 
consumers,  both  where  the  revenue  is  dependent  upon  the  quantity  of 
water  taken  as  received  by  meter  or  at  a  flat  rate.  Commercial  con- 
sumers embrace  residences,  offices,  apartment  houses,  retail  commercial 
establishments,  etc.,  where  water  is  not  used  primarily  for  power  or 
industrial  purposes.  Water  sold  to  the  municipality  for  use  in  publie 
buildings  and  not  included  in  the  contract  for  hydrant  rentals,  and 
other  municipal  uses,  will  be  credited  to  this  account.  Where  a  dis- 
count is  allowed  for  prompt  payment  of  bills,  or  penalty  is  added  for 
non-payment  on  a  fixed  date,  such  discount  or  penalty  shall  be  charged 
or  credited  to  this  account.  The  earnings  shall  be  subdivided  and 
reported  separately  to  the  Railroad  Commission  as  follows: 

A.  Commercial  earnings — flat  rate. 

B.  Commercial  earnings — metered. 

R-2.  EARNINGS  FROM   INDUSTRIAL  SALES: 

( 'ri'dit  this  account  with  all  earnings  from  the  sale  of  water  for  power 
and  industrial  purposes  to  manufacturers  and  industrial  establishments. 

Discounts  allowed  for  prompt  payment  of  bills  or  penalties  added  for 
non-payment,  on  a  fixed  date  (such  as  discounts  or  penalties)  shall  be- 
charged  or  credited  to  this  account.  The  earnings  shall  be  subdivided 
and  reported  separately  to  the  Railroad  Commission  as  follows : 

A.  Earnings  from  Industrial  Sales — flat  rate. 

B.  Earnings  from  Industrial  Sales — metered. 

R-3.  EARNINGS  FROM  MUNICIPAL  HYDRANT  RENTALS: 

Credit  to  this  account  all  revenue  from  the  municipality  for  hydrant 
rental.  Where  the  hydrant  rental  paid  by  the  municipality  includes 
the  use  of  water  for  street  sprinkling  and  flushing  purposes,  and  such 


34  CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS. 

>vater  is  not  being  separately  metered.  the  total  revenue  collected  under 
the  contract  for  hydrant  rental  will  be  credited  to  this  account. 

R-4.  EARNINGS  FROM  SALE  FOR  STREET  SPRINKLING  : 

Credit  to  this  account  all  earnings  from  sale  of  water  for  street 
sprinkling,  both  to  individuals  and  contractors  engaged  in  sprinkling 
streets,  parks,  and  thoroughfares,  and  also  with  sales  to  the  municipality 
where  such  sprinkling  is  performed  by  the  city. 

lt-5.  EARNINGS  FROM  SALES  TO  MUNICIPAL  DEPARTMENTS  : 

Credit  to  this  account  all  earnings  from  the  sale  of  water  to  municipal 
departments  other  than  for  street  sprinkling  if  such  is  performed  by 
the  municipality.  This  includes  earnings  from  the  sale  of  water  for 
sewer  and  street  flushing,  street  constructions,  filling  fire  cisterns  and 
basins,  etc.  Where  a  separate  contract  is  entered  into  for  water  services 
at  public  buildings,  as  schools,  police  and  fire  stations,  city  hall,  etc., 
revenue  collected  under  such  contracts  will  be  credited  to  this  account, 
and  a  record  kept  of  revenue  received  under  each  separate  contract. 

R-6.  EARNINGS  FROM  SALES  FOR  IRRIGATION  : 

Credit  to  this  account  all  earnings  from  the  sale  of  water  for  irriga- 
tion purposes  at  rates  specially  made,  in  any  manner  applied  to  units 
of  consumption. 

R-7.  MISCELLANEOUS  EARNINGS  FROM  OPERATIONS: 

Credit  to  this  account  all  earnings  from  operating  transactions  not 
properly  included  in  the  preceding  accounts. 

OTHER  OPERATING  REVENUES. 

R-8.  PROFIT  ON  MERCHANDISE  SALES: 

Credit  to  this  account  the  receipts  derived  from  the  sale  of  water 
appliances  and  plumbing  fixtures  used  in  the  consumption  and  utiliza- 
tion of  water.  Profit  as  used  in  the  account,  is  defined  as  being  the 
excess  of  the  sales  price  over  the  cash  cost;  including  the  invoice  cost, 
cost  of  handling,  storage,  etc. ;  charge  this  account  with  all  expense  for 
labor  and  material  in  connection  with  the  sale  of  such  appliance  or 
merchandise.  The  net  amount  only,  or  the  profit  on  sales,  is  to  be 
carried  to  "Income  Account."  The  credit  and  charges  to  this  account 
shall  be  made  in  such  a  manner  as  to  admit  of  a  detailed  analysis  when 
called  for  by  the  Railroad  Commission. 

R-9.  PROFIT  ON  PIPING  AND  CONNECTIONS  : 

Credit  this  account  with  all  earnings  derived  from  piping  and  connec- 
tion work  performed  by  the  corporation.  This  includes  earnings  from 
services  performed  on  the  consumer's  premises,  such  as  piping,  con- 


CLASSIFICATION*   OF   ACCOUNTS,   WATER   CORPORATIONS.  35 

necting  and  disconnecting  house  piping  and  water  fixtures,  the  relocat- 
ing of  piping  or  apparatus,  and  other  plumbing  and  fixture  work. 

If  prospective  consumers  are  charged  for  services  performed  by  the 
corporation  in  connecting  the  house  piping  and  plumbing  with  the 
service  connection,  or  for  laying  such  service  piping,  such  earnings 
shall  be  credited  to  this  account.  Charge  to  this  account  all  expenses 
for  labor  and  material  in  connection  with  such  operations.  The  net 
amount  only,  or  the  profit  from  piping  and  connection  wrork  being 
carried  to  the  "Income  Account."  The  credits  and  charges  will  be 
made  in  such  manner  as  to  admit  of  a  detailed  analysis  when  called  for 
by  the  Railroad  Commission. 

WATER  CORPORATIONS— OPERATING   EXPENSE  ACCOUNTS. 

DEFINITIONS  OP  CERTAIN  TERMS  USED  IN  CONNECTION  WITH  EXPENSE 
ACCOUNTS  : 

Except  where  some  other  meaning  is  clearly  specified  in  the  definitions 
of  the  accounts,  the  following  words,  wherever  used  hereunder,  have  the 
meanings  below  stated : 

Cost  means  cash  or  money  cost,  and  not  price  based  on  a  term  of 
•credit. 

Labor  means  human  services  of  whatever  character. 

Cost  of  labor  includes  wages,  salaries  and  fees  paid  to  persons  for 
their  sen-ices. 

Cost  of  materials  and  supplies  includes  all  specifically  assignable 
transportation  charges  incurred  in  obtaining  the  delivery  of  such 
materials  and  supplies  upon  the  premises  of  the  purchaser,  and  cost  of 
any  special  tests  made  thereon  prior  to  their  acceptance;  and  in  case 
the  accounting  person  or  corporation  desires,  it  may  include  a  suitable 
proportion  of  store  expense  (when  the  materials  and  supplies  are  passed 
through  stores)  and  the  cost  of  further  transportation  to  the  place  of 
consumption,  and  a  suitable  proportion  of  the  expense  of  the  pur- 
chasing department,  in  which  case  a  corresponding  credit  shall  be  made 
to  the  suitable  expense  account  as  hereinafter  provided. 

Cost  of  repairs,  when  made  by  the  accounting  person  or  corporation, 
includes  cost  of  labor  expended  and  material  consumed,  less  salvage, 
if  any. 

NOTE. — It  is  not  required  that  the  transportation  element  of  cost  shall  be  assigned 
with  a  greater  degree  of  accuracy  than  to  the  nearest  cent  per  unit  of  material  or 
supply.  Where  a  single  transportation  item  covers  a  multitude  of  things  the  portion 
of  the  expense  not  assigned  to  specific  things  should  be  charged  to  the  same  account 
that  store  expenses  are  charged  to. 


36  CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS. 

GENERAL    ACCOUNTS. 

PUMPING  EXPENSES. 

DISTBIBUTION  EXPENSES. 

COMMERCIAL  EXPENSES. 

GENERAL  AND  MISCELLANEOUS  EXPENSES. 

TAXES. 

DEPRECIATION,  ETC. 

Pumping   Expenses. 

E-l.  SUPERINTENDENCE: 

Charge  to  this  account  the  salary  and  wages  of  superintendent  of 
the  pumping  plant,  the  assistant  superintendent,  foremen,  chemist, 
draftsmen  and  all  clerical  help  upon  records  and  accounts  whether 
such  services  are  performed  at  the  general  office  or  at  the  plant. 

E-2.  PUMPING  LABOR  : 

Charge  to  this  account  the  salary  and  wages  of  all  employees  engaged 
in  operating  pumping  equipment.  This  includes  such  labor  as  that  of 
chief  engineer,  assistant  engineers,  foremen,  helpers,  oilers,  wipers, 
motor  attendants,  shovelers,  weighers,  feed  pump  men,  blowing  flues, 
cleaning  boilers,  and  other  labor  in  engine  and  boiler  and  pump  room 
directly  in  connection  with  power  pumps. 

E-3.  PURIFICATION  LABOR: 

Charge  to  this  account  the  salary  and  wages  of  all  employees  engaged 
in  the  purification  of  water.  This  includes  such  labor  as  cleaning  basins, 
removing  ice,  etc.,  scraping  sand  and  all  processes  of  water  purification 
brought  about  by  plain  sedimentation  with  coagulation,  treatment  for 
softening ;  removal  of  iron,  algae,  etc. ;  purification  by  slow  and  rapid 
sand  filtration  and  other  means. 

E-4.  MISCELLANEOUS  LABOR  : 

Charge  to  this  account  the  salary  and  wages  of  all  employees  in  and 
about  the  pumping  plant,  such  as  watchmen,  janitors,  messengers,  labor 
cleaning  buildings  and  yards ;  also  labor  patrolling  reservoirs,  dams  and 
channels,  and  other  labor  chargeable  to  pumping  plant  not  included  in 
the  foregoing  accounts. 

E-5.  FUEL  FOR  STEAM  : 

Charge  to  this  account  the  cost  of  all  fuel  used  under  boilers  at 
pumping  plant,  whether  coal,  oil,  gas  or  other  fuel,  at  cost,  plus  freight 
charges,  demurrage,  and  labor  discharging  and  transferring  fuel  from 
point  of  delivery  to  place  of  storage. 

E-6.  POWER  PURCHASED  : 

Charge  to  this  account  the  cost  of  all  steam,  electricity,  or  gas  pur- 
chased for  the  operation  of  prime  movers  at  pumping  plant. 


CLASSIFICATION    OF   ACCOUNTS,   WATER   CORPORATIONS.  37 

E-7.  LUBRICANTS,  ETC.  : 

Charge  to  this  account  the  cost  of  all  lubricants  for  power  pumping 
equipment  and  machinery,  such  as  cylinder  oil,  machine  oil,  graphite, 
and  other  lubricants ;  also  boiler  compounds. 

E-8.    PURIFICATION  SUPPLIES  AND  EXPENSES  : 

Charge  to  this  account  the  cost  of  all  supplies  consumed  and  expenses 
incurred  in  the  purification  of  water,  such  as  chemicals,  coagulants,  and 
other  supplies  used  in  the  process  of  water  purification,  softening,, 
removal  of  iron,  algae,  etc. 

E-9.  MISCELLANEOUS  PUMPING  STATION  SUPPLIES  AND  EXPENSES  : 

Charge  to  this  account  all  operating  supplies  and  expenses  of  pumping 
plant  not  chargeable  to  any  of  the  preceding  accounts;  such  as  waste, 
packing,  wipers,  hose,  gaskets,  gauge  glasses,  hand  tools,  gas  and  elec- 
tricity for  lighting,  heating  and  cleaning  pumping  station,  laboratory 
apparatus  and  supplies,  ice,  water  for  general  use  and  fire  protection 
and  all  items  of  similar  nature.  Charge  this  account  with  stationery, 
telephone,  etc. 

E-10.  REPAIRS  TO  POWER  PUMPING  EQUIPMENT: 

Charge  to  this  account  all  labor  and  material  used  in  repairing  power 
pumping  equipment.  This  includes  repairs  to  steam,  hydraulic,  electric 
and  gas  power  pumps  and  pumping  equipment. 

NOTE. — The  accounting  corporation  may,  if  it  so  desires,  subdivide  this  account 
in  order  to  show  details  of  cost  of 

A.     Maintenance  of  Prime  Movers. 
B.     Maintenance    of   Pumps. 

E-ll.  REPAIRS  TO  BOILER  ROOM  AUXILIARY  EQUIPMENT: 

Charge  this  account  with  all  expenses  for  labor  and  material  in  repair- 
ing boilers  and  furnaces,  iron,  steel  and  brick  smoke  stacks,  feed  pumps, 
water  feed  pipes,  injectors,  economizers,  water  heaters,  superheaters, 
valves,  grates,  flues,  mechanical  stoker  equipment,  pipings,  steam  exhaust 
system,  boiler  water  supply  mains,  etc. ;  repairing  coal  and  ash  conveyors, 
trolley  and  cable  towers,  crushers,  belt  links,  conveyor  cars,  winches, 
buckets,  shafts,  chains,  etc. 

E-12.  REPAIRS  TO  PUMPING  STATION  AUXILIARY  EQUIPMENT  : 

Charge  to  this  account  all  labor  and  material  used  in  repairing  pump- 
ing station  auxiliary  equipment  such  as  repairs  to  condensers,  vacuum 
pumps,  oiling  systems,  shafting,  belting,  rope  and  cable  drives,  clutches, 
pulley  and  idler  wheels,  and  auxiliary  motors,  hoists,  cranes  and  other 
auxiliary  electric  equipment,  gas  conductor  and  exhaust  pipes  and  other 
gas  producer  apparatus. 


38  CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS. 

E-13.  REPAIRS  TO  PUMPING  STATION  MISCELLANEOUS  EQUIPMENT  : 

Charge  to  this  account  all  labor  and  material  used  in  repairing  mis- 
cellaneous equipment  not  includible  in  foregoing  accounts.  This 
includes  repairs  to  wagons,  harness,  automobiles,  motorcycles,  bicycles, 
shoeing  horses,  furniture  and  fixtures,  etc. 

E-14.  REPAIRS  TO  SURFACE  SOURCE  OF  SUPPLY  : 

Charge  to  this  account  all  expenses  for  labor  and  material  incurred  in 
making  repairs  to  surface  source  of  supply.  This  includes  repairs  to 
river  and  lake  source,  impounding  reservoirs,  dams,  artificial  lakes  and 
ponds,  canals,  conduits,  embankments,  channels,  waste  weirs,  gates, 
valves,  gate  structures,  pipe  lines,  flumes,  aqueducts,  supporting  trestles, 
viaducts,  and  repairs  to  work  for  utilizing  flow  from  springs. 

E-15.  REPAIRS  TO  GROUND  SOURCE  OF  SUPPLY  : 

Charge  to  this  account  all  expenses  for  labor  and  material  incurred  in 
making  repairs  to  the  ground  source  of  water  supply.  This  includes 
repairs  to  large  open  wells,  shallow  tubular  wells,  deep  artesian  wells, 
etc.,  the  removal  of  sand  or  corroded  material  and  repairs  to  well  casing, 
repairs  to  filter  galleries,  etc. 

E-16.  REPAIRS  TO  COLLECTING  AQUEDUCTS,  INTAKES  AND  SUPPLY  MAINS  : 
Charge  this  account  with  all  expense  for  labor  and  material  in  making 
repairs  to  the  collecting  aqueducts,  intakes  and  supply  mains,  between 
the  source  of  supply  and  the  pumping  equipment  at  the  station.  This 
includes  the  periodical  scraping  to  remove  organic  growth  and  incrusta- 
tion, repairs  to  masonry  of  aqueducts  and  channels,  seeking  and  repair- 
ing leaks,  repairing  pipes  and  removing  and  replacing  worn  sections 
and  fittings,  caulking,  protecting  exposed  parts  of  undermined  supply 
mains,  with  the  necessary  bracing  and  digging  in  connection  therewith, 
repaving  and  repairs  to  valves,  hatch  boxes,  manholes,  etc.,  repairs  to 
regulating  valves,  screens  and  wet  wells,  repairs  and  renewals  of  grat- 
ing, fish  screens  and  repairs  to  submerged  and  exposed  cribs,  intake 
towers  and  other  structures,  sluice  gates,  etc. 

E-17.  REPAIRS  TO  PURIFICATION  PLANT: 

Charge  this  account  with  all  labor  and  material  incurred  in  making 
repairs  to  the  purification  plant.  This  includes  repairs  to  settling 
basins,  renewing  and  washing  sand  and  repairs  to  all  other  equipment 
used  in  the  purification  of  water  by  plain  sedimentation,  sedimentation 
with  coagulation,  treatment  for  softening  and  removal  of  iron,  alga\ 
etc.;  purification  by  slow  and  rapid  sand  filtration,  mechanical  filters. 
etc. 


CLASSIFICATION   OP   ACCOUNTS,    WATER   CORPORATIONS.  39 

E-18.    REPAIRS    TO    PUMPING    STATION    BUILDINGS,    FIXTURES    AND 

GROUNDS  : 

Charge  this  account  with  all  expenses  for  labor  and  material  incurred 
in  repairing  -buildings,  fixtures  and  grounds,  including  permanent 
apparatus,  foundations  for  engines,  pumps  and  boilers,  etc. 

Distribution  Expenses. 

E-19.  PATROLLING  STORAGE  FACILITIES: 

Charge  this  account  with  the  salaries  and  wages  of  all  employees 
engaged  in  patrolling  the  distribution  storage  facilities.  This  includes 
the  wages  of  employees  stationed  at  the  distribution  storage  reservoirs, 
inspection  of  tanks  and  standpipes,  etc.,  including  minor  repairs  made 
by  patrolmen. 

E-20.  METER  AND  FITTINGS  DEPARTMENT  EXPENSES  AND  SUPPLIES: 

Charge  this  account  with  all  expenses  for  labor  and  material,  remov- 
ing and  resetting  meters  on  the  premises  of  the  consumers,  meter  shop 
clerks,  employees  keeping  shop  records,  readjusting,  painting,  replac- 
ing worn  gears,  wearing  parts  and  dials,  testing  and  repairing  old 
meters,  repairing  and  replacing  connections,  meter  fittings,  etc.,  meter 
unions  and  cocks,  and  changing  meters  for  routine  tests,  expenses  such 
as  light,  fuel,  gas,  electricity  and  water  used  for  operating  machinery 
and  for  testing  in  this  department,  hand  tools,  etc. 

E-21.  STREET  DEPARTMENT  EXPENSES  AND  SUPPLIES: 

Charge  this  account  with  expenses  for  labor  and  materials,  inspecting 
the  distribution  system,  flushing  mains  and  hydrants,  pumping  out 
hydrants,  taking  street  pressure,  and  clerical  help  in  connection  there- 
with. This  account  also  includes  all  tools  used  by  street  department 
force  and  the  repair  thereof,  office  supplies,  etc. 

E-22.  CUSTOMERS'  PREMISES  EXPENSES: 

Charge  this  account  with  all  labor  and  material  required  for  adjust- 
ing house  piping,  plumbing  and  water  fixtures,  including  the  cost  of 
new  appliances  or  devices  put  in  to  better  the  service,  and  not  properly 
chargeable  to  repairs,  investigating  reports  of  poor  service,  or  large 
bills,  including  inspection  and  testing  of  house  plumbing,  labor  chang- 
ing meters  for  request  tests,  and  inspecting  new  plumbing,  including 
car  fare,  meals,  etc.,  of  employees  engaged  in  such  work. 

E-23.  REPAIRS  TO  TRANSMISSION  MAINS: 

Charge  this  account  with  all  labor  and  material  incurred  in  repair- 
ing, changing  position  of  or  replacing  transmision  main  between  the 
pumping  station  and  distribution  reservoirs,  tanks,  etc. ;  this  account  to 
include  such  expense  as  seeking  and  repairing  leaks,  repairing  pipes 
and  removing  and  replacing  worn  sections  and  fittings,  caulking,  pro- 


40  CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS. 

tecting  exposed  parts  of  undermined  mains,  digging  and  bracing  in 
connection  with  such  work,  repaying  and  repairing  manholes,  etc., 
together  with  all  material  and  supplies  consumed  in  thawing  pipes  and 
scraping  to  remove  incrustation. 

E-24.  REPAIRS  TO  RESERVOIRS,  TANKS,  AND  STANDPIPES: 

Charge  this  account  with  all  labor  and  material  used  in  repairing 
distribution  reservoirs,  tanks,  and  standpipes.  This  includes  repair  to 
masonry  and  linings  due  to  settlement  of  underlying  material,  frost 
action  or  from  other  cause;  caulking  and  repairing  writh  cement  grout- 
ing, asphalt  or  other  waterproof  material,  painting  and  caulking  stand- 
pipes  and  tanks,  replacing  parts  due  to  decay  or  excessive  corrosion 
or  electrolysis,  and  replacement  of  hoops,  repairs  to  valves,  etc. 

E-25.  REPAIRS  TO  DISTRIBUTION  MAINS  : 

Charge  this  account  with  all  labor  and  material  used  in  repairing, 
overhauling,  changing  position  of  or  replacing  distribution  mains.  This 
includes  seeking  and  repairing  leaks,  repairs  to  pipes,  replacing  and 
removing  worn  sections  and  fittings,  caulking,  protecting  exposed  parts 
of  undermined  mains,  repaving  and  repairs  to  manholes,  the  cost  of  all 
supplies  used,  and  expenses  in  connection  with  thawing  such  mains  and 
removing  incrustation. 

E-26.  REPAIRS  TO  FIRE  CISTERNS,  BASINS,  FOUNTAINS  AND  TROUGHS: 
Charge  this  account  with  all  labor  ar\.d  material  in  repairing  fire 
cisterns  and  basins,  overhauling  and  changing  positions  of  fountains 
and  troughs.  This  includes  repairs  to  masonry  and  lining  due  to  settle- 
ment of  underlying  material,  due  from  frost  action  or  from  other 
causes,  caulking  and  repairing  with  cement  and  other  waterproof 
material,  replacing  worn  parts  and  repairs  and  renewals  to  connecting 
piping  and  fittings,  painting,  etc. 

E-27.  REPAIRS  TO  SERVICES: 

Charge  this  account  with  all  labor  and  material  in  repairing,  over- 
hauling and  changing  position  of  water  service  connections.  This 
includes  such  repairs  as  seeking  and  repairing  leaks,  cleaning  and 
scraping  out  service  pipes,  repairing  and  renewing  service  pipe  con- 
nections to  meters,  including  stop  cocks,  service  boxes,  changing  and 
extending  old  service  pipes  to  put  meters  in  better  location,  thawing- 
out  service  pipes,  etc. 
E-28.  REPAIRS  TO  HYDRANTS  : 

Charge  this  account  with  all  labor  and  material  in  repairing  hydrants. 
This  includes  repairs  and  renewal  of  parts,  including  digging  and  filling- 
in  connection  with  such  repairs,  painting,  replacing  worn  fittings,  pro- 
tecting exposed  parts  of  undermined  hydrants  and  connections,  and 
changing  location  of  hydrants. 


CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS.  41 

E-2!>.  REPAIRS  TO  DISTRIBUTION  BUILDINGS,  FIXTURES,  AND  GROUNDS: 
Charge  to  this  account  all  labor  and  material  incurred  in  repairing 

buildings,  fixtures  and  grounds  devoted  exclusively  to  the  distribution 

system. 

E-30.  REPAIRS  TO  DISTRIBUTION  MISCELLANEOUS  EQUIPMENT  : 

Charge  to  this  account  all  labor  and  material  repairing  miscellaneous 

equipment  of  the  distribution  system.     This  includes  repair  of  tools 

and  appliances    (working  stock  only),  wagons,  harness,  automobiles, 

motorcycles,  bicycles,  furniture  and  fixtures   (when  not  a  permanent 

part  of  buildings),  shoeing  horses,  etc. 

Commercial    Expenses. 

E-31.  COLLECTIONS,  READING  METERS,  ETC. 

Charge  to  this  account  all  salaries  and  expenses  of  collection  depart- 
ment employees,  taking  application  for  water  service,  reading  meters, 
preparing,  delivering  and  collecting  bills  and  such  expenses  as 
stationery,  stamps,  etc. ;  the  premium  on  surety  bonds  of  employees  of 
the  collection  department,  and  fees  and  commissions  paid  for  collecting 
bills. 

E-:>2.  PROMOTION  OF  BUSINESS,  SALARIES,  AND  EXPENSES  : 

Charge  to  this  account  all  salaries  and  expenses  of  all  employees 
whose  services  are  devoted  to  the  promotion  and  extension  of  business, 
including  canvassers,  solicitors,  demonstrators,  distributors  of  circulars 
and  advertising  matter,  all  commissions  paid  to  canvassers,  solicitors 
and  dealers  for  the  introduction  and  sale  of  water  appliances,  etc.,  and 
such  expenses  as  stationery  and  supplies,  advertising  in  newspapers  and 
periodical  posters,  dodgers,  handbills,  circulars,  etc. 

General  Expenses. 

E-:M.  SALARIES  OF  GENERAL  OFFICERS  : 

Charge  to  this  account  the  salaries  of  general  officers,  including  the 
President,  Vice-President,  General  Manager,  Secretary,  Treasurer, 
Comptroller,  Auditor,  and  all  other  officers  whose  jurisdiction  extends 
over  the  entire  business  and  whose  services  are  not  chargeable  to  any 
particular  department. 

E-34.  SALARIES  OF  GENERAL  OFFICE  CLERKS: 

Charge  to  this  account  the  salaries  of  all  clerks  and  assistants  con- 
nected with  the  general  office,  except  such  as  may  be  directly  engaged 
in  other  departments,  in  which  case  their  salaries  should  be  charged  to 
such  departments  direct.  Where  general  office  clerks  also  perform 
services  for  other  departments,  their  salartes  will  be  apportioned  accord- 
ingly and  charged  to  the  respective  departmental  account  in  accordance 
with  service  performed. 


42  CLASSIFICATION    OF   ACCOUNTS,   WATER   CORPORATIONS. 

E-35.  MISCELLANEOUS  GENERAL  OFFICE  SUPPLIES  AND  EXPENSES: 

Charge  to  this  account  the  cost  of  all  supplies  and  expenses  such  as 
messenger  and  janitor  service,  newspapers  and  periodicals,  directories, 
telegrams,  exchange  on  remittances,  books,  stationery  and  telephone, 
etc.,  rent  of  general  offices,  heating  of  general  offices,  etc. ;  also  traveling 
and  incidental  expenses  of  general  officers  and  attendants. 

E-36.  LAW  EXPENSES— GENERAL: 

Charge  to  this  account  all  law  expenses  except  those  incurred  in  con- 
nection with  the  defense  and  settlement  of  injury  and  damage  claims; 
the  salaries  and  expenses  of  counsel,  solicitors  and  general  attorneys, 
their  clerks  and  attendants,  etc.  All  law  books,  printing  briefs,  legal 
forms,  testimony,  reports,  fees  and  retainers  of  general  counsel  and 
attorneys,  court  costs  and  payment  of  specific  notarial  and  witness  fees, 
expenses  of  taking  depositions,  and  other  general  law  and  court 
expenses.  Expenses  of  arbitrators  of  disputed  points  should  also  be 
charged  to  this  account. 

E-37.  RAILROAD  COMMISSION  EXPENSE: 

Charge  to  this  account  all  fees  and  expenses  of  counsel,  solicitors, 
attorneys,  clerks,  attendants,  expert  witnesses,  and  others  whose  services 
are  secured  in  the  defense  and  prosecution  of  all  petitions  and  other 
transactions  before  the  Railroad  Commission  of  California. 

Expenses  which  are  made  necessary  by  rules,  regulations,  and  order 
of  the  Commission,  as  improvement  of  service,  additional  inspection, 
etc.,  will  not  be  charged  to  this  account  but  direct  to  department  expense 
account  affected. 

E-38.  INJURIES  AND  DAMAGES: 

Charge  to  this  account  all  damages  to  or  destruction  of  property  other 
than  that  owned  by  the  corporation,  and  all  expenses  incident  to  injury 
or  death  to  employees,  and  other  persons  for  whose  injury  or  death  the 
corporation  is  held  liable,  or  in  the  settlement  of  which  claim  allowances 
are  made.  This  includes  judgment  for  damages,  accident,  or  death,  and 
plaintiff's  court  costs,  proportion  of  salaries  and  expense  or  fees  of 
physicians  and  surgeons,  expense  of  undertakers,  nurses  and  hospital 
attendants,  medical  and  surgical  appliances  and  salaries  and  expenses 
paid  to  disabled  employees,  salaries  and  expenses  of  claim  agents, 
adjusters  and  their  assistants ;  the  compensation  of  general  counsel  and1 
attorney  of  the  corporation,  and  other  attorneys  while  engaged  in  the 
defense  and  settlement  of  damage  suits. 

NOTE  A. — Corporations  are  at  liberty  to  subdivide  this  account  to  show  the  follow- 
ing expenses: 

A.  Injuries  to  Persons. 

B.  Damages  to  Property. 

NOTE  B. — Where  such  subdivision  is  not  made,  the  account  should  be  so  kept  as  to 
admit  of  the  separation  over  two  such  sub-accounts  when  called  for  by  the  Railroad 
Commission. 


CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS.  43 

E-39.  RELIEF  DEPARTMENT  AND  EXPENSES  : 

Charge  to  this  account  pensions  paid  to  retired  employees  or  represen- 
tatives of  former  employees  and  expenses  in  connection  therewith, 
salaries  and  expenses  incurred  in  conducting  a  relief  department,  and 
contributions  made  to  such  department. 

E-40.  WATER  FRANCHISE  REQUIREMENTS  : 

Charge  to  this  account  the  cost  of  all  service  and  materials  and  sup- 
plies furnished  to  municipal  corporations  in  compliance  with  franchise 
requirements  and  for  which  no  payment  is  received  by  the  corporation ; 
also  of  all  direct  expense,  such  as  paving  and  other  like  matters  incurred 
in  compliance  with  such  requirements  and  for  which  no  reimbursement 
is  received  by  the  corporation.  Amounts  charged  to  this  account  for 
which  there  is  no  direct  money  outlay  shall  be  credited  to  Account 
No.  E^5,  "Undistributed  Adjustments— Balance. " 

E-41.  OTHER  GENERAL  EXPENSES  : 

Charge  to  this  account  such  incidental  general  expenses  as  are  not 
provided  for  in  the  foregoing  accounts,  such  as  cost  of  publishing 
notice  of  stockholders'  meetings,  of  election  of  directors,  annual  reports 
in  newspapers,  and  of  dividends  declared;  and  fees  and  expenses  paid' 
to  directors. 

E-42.  INSURANCE: 

Charge  to  this  account  premiums  paid  to  insurance  companies  for 
fire,  fidelity,  boilers,  casualty,  burglary  and  all  other  insurance;  also 
amounts  set  aside  as  an  insurance  reserve  if  it  is  decided  to  open  such 
an  account. 

E-43.  REPAIRS  TO  GENERAL  STRUCTURES: 

Charge  to  this  account  the  cost  of  repairing  all  buildings  and  other 
structures  of  a  permanent  character  devoted  to  general  purposes,  such 
as  general  office  buildings,  general  shop  buildings,  general  storehouse 
buildings,  general  stable  buildings,  etc.  This  includes  such  repairs  as 
all  fixtures  attached  to  and  made  a  permanent  part  of  the  buildings, 
such  as  water  pipes  and  fixtures,  steam  pipes,  and  fixtures  for  warming 
and  ventilating,  gas  pipes,  electric  wiring,  elevators,  etc.,  and  the 
engines  and  motors  specially  provided  for  operating  them,  foundation 
for  machinery  and  apparatus  as  are  designed  to  be  as  permanent  as  the 
buildings  in  (or  in  connection  with)  which  they  are  constructed,  and 
to  outlast  the  first  machinery  installed  and  mounted  thereon. 

NOTE. — Where  general  offices,  shops,  stables,  etc.,  are  includible  In  buildings  form- 
ing a  part  of  the  pumping  or  distribution  system,  no  part  of  the  cost  of  repairs  should 
be  charged  to  this  account. 


44  CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS. 

E-44.  REPAIRS  OF  GENERAL  EQUIPMENT: 

Charge  to  this  account  the  cost  of  repairing  all  equipment  of  general 
offices,  general  shops,  general  stores,  and  general  stables,  etc.  This 
includes  all  repairs  of  desks,  chairs,  tables,  filing  cases,  drafting  room 
equipment,  etc.,  and  of  shops  such  as  furnaces,  boilers,  engines,  machine 
tools,  smithing  equipment,  shafting,  belts,  etc. ;  and  of  store  such  as 
movable  counters,  shelving  and  other  movable  equipment  of  like  nature, 
carts,  barrows,  trucks,  etc.,  and  other  apparatus  used  in  handling 
material,  and  of  stables  such  as  wagons,  harness,  automobiles,  bicycles, 
etc.,  shoeing  horses,  and  all  equipment  of  shoeing  shops. 

NOTE  A. — Counters,  shelving  and  the  like  which  are  permanently  attached  to  the 
structure  shall  be  charged  to  Account  No.  E— 43,  "Repairs  to  General  Structures." 

NOTE  B. — The  Accounting  Corporation  may,  if  it  so  desires,  subdivide  the  account 
under  sub-accounts,  as  under,  in  order  to  keep  record  of  cost  of  repairs  to  various 
classes  of  equipment. 

A.  General  Office  Equipment. 

B.  General  Shop  Equipment. 

C.  General  Store  Equipment. 

D.  General  Stable  and  Garage  Equipment. 

E-45.  UNDISTRIBUTED  ADJUSTMENTS — BALANCE: 

At  least  once  a  year  an  inventory  of  materials  and  supplies  and  of 
tools  shall  be  taken,  and  the  difference  between  the  inventories  and  the 
ledger  balances  shall  be  debited  or  credited  to  this  account  in  case  it 
can  not  be  assigned  to  specific  accounts  as  provided  under  Account 
Xo.  9.  "Materials  and  Supplies."  Credit  to  this  account  all  discounts 
recovered  through  the  prompt  payment  of  bills  for  material  and  sup- 
plies consumed  in  operation  unless  such  discounts  are  applied  to  the 
particular  bills;  also  amounts  included  in  expenses,  as  provided  in 
Account  No.  E-40,  "Water  Franchise  Requirements." 

E-46.  WATER  EXPENSES  TRANSFERRED — CR.  : 

Credit  to  this  account  the  proportion  of  operating  expenses  (includ- 
ing depreciation  and  other  amortization,  as  well  as  repairs)  chargeable 
to  other  coordinate  departments  within  the  same  corporation,  but 
defrayed  in  the  first  instance  by  the  water  department. 

NOTE. — Do  not  credit  to  this  account  any  allowance  in  the  nature  of  rent  or  returns 
upon  the  cost  or  value  of  property. 

E-47.  JOINT  OPERATING  EXPENSES — CR.  : 

When  any  general  or  miscellaneous  operating  expenses  are  assumed 
by  the  accounting  corporation  for  the  joint  benefit  of  itself  and  other 
water  corporations  under  an  arrangement  for  apportioning  such  ex- 
pense, the  portion  chargeable  to  others  should  be  credited  to  this 
account.  The  portion  so  credited  must  not  include  any  allowance  for 
profit  or  return  upon  the  value  of  the  property. 

NOTE. — Bills  rendered  for  joint  expenses  should  show  the  expenses  in  detail  and 
the  debtor  corporation  should  distribute  the  total  amount  to  its  primary  expense 
accounts. 


CLASSIFICATION    OF   ACCOUNTS,   WATER   CORPORATIONS.  45 

E-48.  EXTRAORDINARY  REPAIRS: 

Charge  to  this  account  and  concurrently  credit  to  account,  "Reserve 
for  Extraordinary  Repairs,"  the  estimated  monthly  provision  for 
extraordinary  repairs  necessitated  by  sleet  storms,  fire,  floods,  etc. 

E-49.  REPAIRS  CHARGED  TO  RESERVES — CR.  : 

Credit  to  this  account  and  charge  concurrently  to  the  account, 
'•Reserve  for  Accrued  Depreciation,"  an  amount  equal  to  the  cost  of 
extraordinary  repairs  for  which  provision  has  been  made  in  that 
reserve;  also  credit  to  this  account  and  charge  concurrently  to  the 
insurers  or  to  the  insurance  reserve  an  amount  equal  to  the  cost  of 
repairs  made  necessary  by  casualties  when  such  cost  is  covered  by  insur- 
ance or  an  insurance  reserve.  All  such  repairs  should  be  charged  in  the 
first  instance  to  the  proper  repair  accounts. 

TAXES. 

E-50.  TAXES: 

This  account  should  be  charged  (account  Taxes  Accrued  being  cred- 
ited) regular  monthly  installments  sufficient  to  cover  all  taxes  imposed 
by  lawful  authority. 

A.  Upon  property  real,  personal  and  mixed  (except  assessments 
for  betterment  to  real  estate,  which  should  be  charged  to  account 
benefited). 

B.  Upon   earnings   in   addition   to   or  in   lieu   of   taxes   upon 
property. 

C.  All  specific  licenses  or  charges  levied  upon  the  corporation 
based  upon  or  with  respect  to  its  capital  stock,  property  or  business. 

D.  The  value  of  all  discounts  allowed  or  services  rendered  in 
lieu  of  taxes. 

NOTK. — The  amount  of  taxes  accrued  during  any  month  shall,  when  the  levy  is 
unknown,  be  estimated,  and  when  the  levy  is  finally  determined  the  estimate  shall  be 
corrected  in  the  provision  for  taxes  during  the  remainder  of  the  year.  For  example, 
if  at  the  beginning  of  the  tax  year  the  taxes  against  the  corporation  are  estimated 
to  be  $600  for  the  year,  the  estimated  monthly  charge  will  be  $50.  If  during  the 
fifth  month  it  is  found  that  the  levy  is  $640,  adjustment  should  be  made  and  a  charge 
of  $55  per  month  made  to  Taxes  for  the  remaining  eight  months  of  the  tax  year. 

GENERAL    AMORTIZATION    OF    CAPITAL. 

E-51.  AMORTIZATION  OF  FRANCHISES  AND  PATENTS  : 

Charge  to  this  account  each  month  the  amount  necessary  to  cover 
such  portions  of  the  life  of  franchises  and  patents  as  has  expired  or 
been  consumed  during  the  month.  The  amount  so  charged  shall  be 
concurrently  credited  to  an  appropriate  sub-account  under  Account 
No.  30,  "Reserve  for  Amortization  of  Intangible  Capital." 

NOTE. — The  amount  so  charged  to  this  account  shall  be  based  upon  a  rule  deter- 
mined by  the  accounting  corporation  and  filed  with  the  Railroad  Commission.  The 
purpose  and  effect  of  such  rule  should  be  to  accumulate  by  charges  equitably  dis- 
tributed throughout  the  life  of  any  franchise  or  patent,  a  reserve  that  will,  at  the 
expiration  of  its  life,  equal  the  original  cost. 


46  CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS. 

E-52.  DEPRECIATION  OF  PLANT  AND  EQUIPMENT  : 

Charge  to  this  account  monthly  the  amount  estimated  to  be  necessary 
to  cover  the  depreciation  accruing  during  the  month  in  the  corporation 's 
tangible  capital.  The  amount  charged  to  this  account  shall  be  concur- 
rently credited  to  account,  " Reserve  for  Accrued  Depreciation." 

NOTE. — Charges  to  above  depreciation  account  should  be  reported  separately  under 
the  following  sub-heads : 

A.  Depreciation  on  Pumping  Capital. 

B.  Depreciation  on  Distribution  Capital. 

C.  Depreciation  on  General  Capital. 

CLEARING    ACCOUNTS. 

(Not  required  of  Class  B  and  C  Corporations.) 

The  following  accounts  are  provided  for  certain  expenses  which 
usually  affect  several  classes  of  operations  but  need  to  be  brought 
together  in  one  account  in  order  that  the  total  of  the  expenses  may  be 
known  and  properly  distributed. 

An  inventory  of  tools,  harness,  vehicles,  and  other  materials  and 
supplies  in  shops,  stores,  stables,  and  garages  shall  be  taken  at  least 
once  a  year,  and  any  loss  disclosed  by  such  inventory  in  excess  of  the 
amount  taken  into  account  through  the  depreciation  currently  charged 
out  should  be  apportioned  to  the  appropriate  expense  accounts  on  the 
basis  of  charges  made  since  last  inventory. 

1.  Shop  Expense.     This  account  or  appropriate  sub-accounts  should 
be  arranged  so  as  to  record  separately  the  expenses  of  the  general  shops 
as  follows:   (1)   Salary  and  wages  of  shop  employees ;  (2)  personal  and 
incidental  expenses  of  such  employees;  (3)  materials  and  supplies  for 
general  shop   use ;    (4)  repairs   of  tools,   machinery   and  appliances ; 

(5)  rent  of  shop  buildings;  (6)   depreciation  of  tools,  machinery,  and 
appliances. 

The  shop  expense  account  should  be  cleared  by  apportioning  the 
total  amount  of  the  expenses  to  the  various  jobs  on  an  equitable  basis. 

2.  Stable  and  Garage  Expense.     This  account  or  appropriate  sub- 
accounts  should  be  arranged  so  as  to  record  separately  the  expenses  of 
stables  and  garages  as  follows:   (1)   Salaries  and  wages  of  drivers, 
chauffeurs,  stablemen,  garagemen,  and  other  employees  in  stables  and' 
garages;    (2)  personal   and   incidental    expenses   of   such   employees; 
(3)  materials  and  supplies,  including  fuel  and  gasoline,  harness,  tires, 
and  other  supplies  for  stables  and  garages;  (4)  repairs  of  automobiles 
and  other  vehicles  and  harness;    (5)   rent  of  buildings  or  vehicles; 

(6)  depreciation  on  vehicles,  horses,  harness,  etc. 

Credit  to  this  account  any  charges  for  service  performed  for  others. 

A  record  should  be  kept  of  the  use  of  teams  and  automobiles,  and 
each  month  the  total  expense  should  be  apportioned  to  the  proper 
accounts  according  to  use,  or  the  debits  to  the.  expense  accounts  may  be 


CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS.  47 

made  at  rates  per  hour  of  service  which  have  been  found  to  be  fair  and 
to  distribute  the  total  expense  equitably. 

3.  Tool  Expense.     Charge  to  this  account  all  expense  for  tools  (except 
shop  tools  carried  as  supplies  unissued).     It  includes  the  cost  of  small 
hand  tools  of  which  no  account  is  kept  after  issue ;  the  cost  of  repairing 
tools :  the  cost  of  tools  lost  or  stolen,  and  depreciation  on  tools  taken  out 
of  service  because  of  breakage  or  other  deterioration. 

This  account  should  be  cleared  by  adding  to  the  expense  of  repairs 
and  cost  of  plant  installed  each  month  such  amounts  as  will  equitably 
distribute  the  total  monthly  expense  for  tools. 

4.  Supply  Expense.     Charge  to  this  account  or  to  appropriate  sub- 
accounts  all  expenses   (except  insurance  and  taxes)  incurred  directly 
in  connection  with  the  purchase,  storage,  handling,  and  distribution  of 
materials  and  supplies  and  stationery.     It  includes  the  pay  and  expenses 
of  purchasing  agents,  managers  of  stores,  clerks,  and  laborers ;  rents  of 
stores,  cost  of  lighting,  heating,  and  undistributed  freight  and  express 
charges,  and  the  estimated  depreciation  on  supplies  due  to  breakage, 
leakage,  shortage,  and  wear  and  tear.     This  account  should  be  cleared 
by  adding  to  the  cost  of  materials  and  supplies  passing  through  stores 
a  suitable  loading  charge  which  will   equitably   distribute  the   total 
cost  of  conducting  the  stores,  and  by  adding  to  the  cost  of  such  supplies 
as  are  bought  by  the  purchasing  department  pro  rata  share  of  the  total 
expenses  of  the  purchasing  department. 

5.  Engineering  Expense.     Charge  to  this  account  or  appropriate  sub- 
accounts  all  expenses  for  engineering  so  as  to  show  separately  the 
following:   (1)   Salaries  and  wages;    (2)  personal  and  incidental  ex- 
penses of  engineering  department  employees;    (3)  rent  of  office  and 
office  expenses. 

This  account  should  be  cleared  by  apportioning  the  total  expenses  to 
Operating  Expense  and  Fixed  Capital  accounts  on  the  basis  of  service 
rendered,  as  determined  by  the  actual  time  devoted  to  particular  jobs 
or  an  equitable  basis  fixed  by  the  officers  of  the  corporation. 

6.  Plant  Supervision  Expense.     Charge  to  this  account  the  cost  of 
general  supervision  of  the  maintenance  and  construction  of  the  plant 
where    a    separate    department    of    the    corporation's    organization    is 
charged  with  such  supervision.     It  includes  the  pay  and  expenses  of 
the  plant  supervising  officers,  such  as  the  general  plant  superintendent, 
district  plant  superintendent,  plant  engineers  and  their  office  and  field 
forces,   charged  with  planning  for  and  superintending  the  work  of 
maintenance  and  plant  construction. 

The  account  or  appropriate  sub-accounts  should  be  so  arranged  as  to 
show  in  detail  the  expenses  of  the  plant  supervision  department  as 
follows:  (1)  Salaries  and  wages;  (2)  personal  and  incidental  expenses 
of  employees;  (3)  rent  of  offices  and  office  expenses. 


48  CLASSIFICATION    OP   ACCOUNTS,   WATER   CORPORATIONS. 

This  account  should  be  cleared  each  month  by  charging  directly  to 
the  appropriate  accounts  such  expenses  as  can  be  allocated  to  particular 
pieces  of  work  and  by  charging  out  the  balance  on  the  basis  of  labor 
employed  in  all  construction  or  maintenance  work  in  progress  during 
the  month. 

NOTE. — The  pay  of  general  foremen  and  foremen  in  direct  charge  of  jobs  should 
be  included  in  the  cost  of  the  job  and  not  charged  to  this  account. 

Every  water  corporation  shall  include  in  its  expenses  depreciation 
charges  for  the  purpose  of  creating  proper  and  adequate  reserves  to 
cover  the  expenses  of  depreciation  currently  accruing  in  its  fixed 
capital,  and  for  that  purpose  three  accounts  are  provided  for  the 
expense  of  depreciation  as  above:  Account  E-52,  "Depreciation  of 
Plant  and  Equipment";  Account  E-48,  "Extraordinary  Repairs"; 
Account  E-51,  "Amortization  of  Franchises  and  Patents." 

By  "Expense  of  Depreciation"  is  meant  the  loss  suffered  through 
the  current  lessening  in  value  of  tangible  property  from  wear  and 
tear,  decay,  obsolesence,  or  inadequacy  resulting  from  use,  age,  physical 
change  or  supersession  by  reason  of  new  inventions  and  discoveries, 
changes  in  popular  demand,  or  public  requirements ;  also  losses  suffered 
through  destruction  of  property  by  extraordinary  casualties  and  de- 
creases in  the  values  of  intangible  property  through  lapse  of  time. 

The  amount  charged  as  expense  of  depreciation  shall  be  based  upon 
values  determined  by  the  accounting  corporation.  Such  rules  may  be 
devised  from  a  consideration  of  the  corporation's  history  and  experi- 
ence. Whatever  may  be  the  basis,  the  rules  and  a  sworn  statement  of 
the  facts  and  expert  opinions  and  estimates  upon  which  they  are  based 
shall  be  filed  with  the  Railroad  Commission.  Each  amendment  of  any 
rule,  together  with  statements  and  opinions,  shall  be  also  filed  with  the 
Railroad  Commission,  before  they  are  put  into  effect  by  the  accounting 
corporation,  and  shall  show  the  date  when  they  are  to  become  effective. 


WATER  CORPORATIONS. 


LIST  Of  ACCOUNTS.     BALANCE  SHEET  ACCOUNTS. 


ASSET  ACCOUNTS. 

PAGE. 

1.  Fixed  Capital  Installed  Prior  to  January  1,  1913—  6 

2.  Fixed  Capital  Installed  Since  December  31,  1912 7 

3.  Cash  and  Deposits 7 

A.  Cash 7 

B.  Special  Deposits 7 

4.  Notes  Receivable 7 

5.  Accounts  Receivable , 7 

A.  Accounts  with  System  Corporations 7 

B.  Due  from  Consumers  and  Agents 8 

C.  Miscellaneous  Accounts  Receivable 8 

6.  Interest  and  Dividends  Receivable 8 

7.  Other  Current  Assets 8 

s.    Investments. S 

A.  Securities  of  Other  Corporations 8 

B.  Advances  to  System  Corporations  for  Construction,  Equipment  and 

Betterment    9 

C.  Miscellaneous  Investments 9 

9.  Materials  and  Supplies 9 

10.  Sinking  Funds 10 

11.  Other  Special  Funds 10 

12.  Treasury   Securities  10 

13.  Prepaid  Expenses 10 

A.  Prepaid  Rents 10 

B.  Prepaid  Taxes 10 

C.  Prepaid  Insurance 11 

D.  Other  Prepayments 11 

14.  Unamortized  Discount  on  Securities  and  Expense 11 

15.  Other  Suspense 11 

16.  Construction  Work  in  Progress 12 

17.  Corporate   Deficit  12 

LIABILITY  ACCOUNTS. 

IS.   Capital  Stock 12 

19.  Installments  on  Stork   Subscription 12 

20.  Funded  Debt 12 

21.  Receiver's  Certificates 13 

22.  Advances    from    System    Corporations    for    Construction,    Equipment    and 

Betterments 13 

23.  Notes  Payable 13 

24.  Accounts  Payable 13 

A.  Accounts  with  System  Corporations 13 

B.  Audited  Vouchers  and  Wages  Unpaid 13 

C.  Consumer's  Deposits 14 

D.  Miscellaneous   Accounts   Payable .  14 


50  CLASSIFICATION  OP   ACCOUNTS,   WATER   CORPORATIONS. 

PAGE. 

25.  Interest  Accrued 14 

26.  Taxes  Accrued 14 

27.  Dividends   Declared   14 

28.  Service  Billed  in  Advance 14 

29.  Reserve  for  Accrued  Depreciation 15 

30.  Reserve  for  Amortization  of  Intangible  Capital 15 

31.  Unamortized  Premium  on  Debt 15 

32.  Casualty  and  Insurance  Reserve 16 

33.  Income  Invested  since  December  31,  1912,  in  Fixed  Capital 16 

34.  Reserve  Invested  in  Sinking  Funds 17 

35.  Other  Reserves  from  Income  or  Surplus 17 

36.  Corporate  Surplus  Unappropriated 17 

FIXED  CAPITAL. 
Intangible  Capital. 

C-  1.  Organization   17 

C-  2.  Franchises  and  Water  Rights 18 

C-  3.  Patent  Rights 18 

C-  4.  Other  Intangible  Capital _' 19 

TANGIBLE  CAPITAL. 

Landed  Capital. 

C-  5.  Land  Devoted  to  Water  Operations 19 

Pumping  Capital. 

C-  6.  Buildings,  Structures,  etc 19 

C-  7.  Pumping  Equipment 20 

C-  8.  Collecting  Aqueducts,  Intakes  and  Supply  Mains 20 

C-  9.  Purification  System 20 

C-10.  Miscellaneous  Pumping  Equipment 21 

Distribution  Capital. 

C-ll.  Transmission  Mains 21 

C-12.  Distribution  Mains   21 

C-13.  Services  21 

C-14.  Hydrants,  Fire  Cisterns,  Fountains,  etc 21 

C-15.  Meters    22 

C-16.  Miscellaneous  Distribution  Equipment 22 

General  Capital. 

C-17.  General  Structures 22 

C-18.  General  Equipment 23 

C-19.  Undistributed  Construction  Expenditures 23 

A.  Engineering  and  Superintendence 23 

B.  Law  Expenses  during  Construction 24 

C.  Injuries  and  Damages  during  Construction 24 

D.  Taxes  during  Construction 24 

E.  Miscellaneous  Construction  Expenditures 24 

C-20.  Interest  during  Construction 25 

C-21.  Cost  of  Plant  Purchased  in  Lieu  of  Plant  Constructed 25 

C-22.  Fixed  Capital  in  Other  Departments 25 

C-23.  Fixed  Capital  Installed  Prior  to  January  1,  1913 25 

C-24.  Fixed  Capital  Installed  Since  December  31,  1912 26 


INDEX.  51 

INCOME  ACCOUNTS. 

PAGE. 

101.  Operating  Revenues 26 

102.  Operating  Expenses 26 

103.  Uncollectible  Water  Bills 27 

104.  Non-operating  Revenues 27 

A.  Rents  from  Buildings.  Land  and  Apparatus 27 

B.  Interest  and  Dividend  Revenues 27 

C.  Sinking  and  Other  Reserve  Fund  Accretions 27 

D.  Profits  from  Operations  of  Others 27 

E.  Miscellaneous  Non-operating  Revenues 28 

105.  Non-operating  Revenue  Deductions 28 

A.  Rent  Expenses 28 

B.  Interest  Expense 28 

C.  Dividend  Expense  28 

D.  Others'  Operations   Expense 28 

E.  Miscellaneous  Non-operating  Expense 28 

F.  Non-operating  Taxes 28 

G.  Uncollectible  Non-operating  Revenues 28 

106.  Interest  Accrued  on  Funded  Debt 29 

107.  Other  Interest  Deductions 29 

108.  Rent  Deductions ' 29 

A.  Rent  for  Lease  of  Other  Water  Plant 29 

B.  Miscellaneous  Rent  Deductions 29 

109.  Amortization  of  Debt  Discount  and  Expense 1_  29 

110.  Amortization  of  Premium  on  Debt — Cr 30 

111.  Miscellaneous  Deductions  from  Income 30 

A.  Loss  on  Operations  of  Others 30 

B.  Amortization  of  Landed  Capital 30 

C.  Other  Contractual  Deductions  from  Income 30 

CORPORATE  SURPLUS  OR  DEFICIT  ACCOUNT. 

112.  Dividends  on  Outstanding  Stock 31 

113.  Sinking  Fund  Appropriations 31 

114.  Miscellaneous  Deductions  from  Surplus 31 

A.  Expenses  Unprovided  for  Elsewhere 31 

B.  Realized  Depreciation  not  Covered  by  Reserve 32 

C.  Amortization  Unprovided  for  Elsewhere 32 

D.  Gifts  to  Controlled  Corporations 32 

E.  Appropriations  to  Reserve 32 

F.  Other  Appropriations  from  Surplus 32 

G.  Other  Deductions  from  Surplus 32 

115.  Miscellaneous  Additions  to  Surplus 32 

OPERATING  REVENUES. 

R-l.  Earnings  from  Commercial  Sales 33 

R-2.  Earnings  from  Industrial  Sales 33 

R-3.  Earnings  from  Municipal  Hydrants  Rentals 33 

R-4.  Earnings  from  Sales  for  Street  Sprinkling 34 

R-5.  Earnings  from  Sales  to  Municipal  Departments 34 

R-6.  Earnings  from  Sales  for  Irrigation 34 

R-7.  Miscellaneous  Earnings  from  Operation .  34 


52  CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS. 

OTHER  OPERATING   REVENUES. 

PAGE. 

R-8.  Profit  on  Merchandise  Sales 34 

K-!>.  Profit  on  Piping  and  Connections 34 

PUMPING  EXPENSES. 
CLASS  A. 

E-  1.  Superintendence 36 

E-  2.  Pumping  Labor 36 

E-  3.  Purification  Labor , 36 

E-  4.  Miscellaneous  Labor 36 

E-  5.  Fuel  for  Steam 36 

E-  6.  Power  Purchased 36 

E-  7.  Lubricants,   etc.   37 

E-  8.  Purification  Supplies  and  Expenses 37 

E-  9.  Miscellaneous  Pumping  Station  Supplies  and  Expenses 37 

E-10.  Repairs  to  Power  Pumping  Equipment 37 

E-ll.  Repairs  to  Boiler  Room  Auxiliary  Equipment 37 

E-12.  Repairs  to  Pumping  Station  Auxiliary  Equipment 37 

E-13.  Repairs  to  Pumping  Station  Miscellaneous  Equipment 38 

E-14.  Repairs  to  Surface  Source  of  Supply 38 

E-15.  Repairs  to  Ground  Source  of  Supply 38 

E-16.                   Repairs  to  Collecting  Aqueducts,  Intakes  and  Supply  Mains 38 

E-17.  Repairs  to  Purification  Plant 38 

E-18.  Repairs  to  Pumping  Station,  Buildings,  Fixtures  and  Grounds 39 

CLASS  B. 

E-  1  to  E-  4.  Operating   Labor 36 

E-  5  to  E-  6.  Fuel  and  Power  Purchased 36 

E-  7  to  E-  9.  Pumping  Station  Supplies  and  Expenses 37 

E-10  to  E-13.  Repairs  to  Pumping  Station  Equipment 37,38 

E-14  to  E-lo.  Repairs  to  Source  of  Supply 38 

E-16.                   Repairs  to  Collecting  Aqueducts,  Intakes,  and  Supply  Mains 38 

E-17  to  E-18.  Repairs  to  Buildings,  Grounds  and  Purification  Plant 38,39 

CLASS  C. 

E-  1  to  E-  9.  Operating  Labor  and  Expenses 36,  37 

E-10  to  E-1S.  Repairs  to  Operating  Capital 37.38,39 

DISTRIBUTION  EXPENSES. 
CLASS  A. 

E-19.  Patrolling  Storage  Facilities 39 

E-20.  Meter  and  Fitting  Department  Expenses  and  Supplies 39 

E-21.  Street  Department  Expenses  and  Supplies 39 

E-22.  Customers'  Premises  Expenses 39 

E-23.  Repairs  to  Transmission  Mains 39 

E-24.  Repairs  to  Reservoirs,  Tanks  and  Standpipes 40 

E-25.  Repairs  to  Distribution  Mains 40 

E-26.  Repairs  to  Fire  Cisterns,  Basins,  Fountains  and  Troughs 40 

E-27.  Repairs  to  Services 40 

E-28.  Repairs   to   Hydrants 40 

E-29.  Repairs  to  Distribution  Buildings  and  Grounds 41 

E-30.  Repairs  to  Distribution  Miscellaneous  Equipment—.                                       _  41 


INDEX.  53 

(.JLASS  B.  PAGE 

E-19  to  B-20.   Distribution  System  Labor  and  Expense 39 

E-23  to  E-20.  Repairs  to  Transmission  and  Distribution  Systems 39,40 

E-27  to  18-28.   Repairs  to  Services 40 

E-29  to  E-30.  Repairs  to  Buildings,  Grounds  and  Equipment 41 

CLASS  C. 

E-19  to  B-22.   Distribution  System  Labor  and  Expense 39 

E-23  to   E-30.  Repairs  to  Distribution  and  Transmission  Capital 39,40,41 

COMMERCIAL  EXPENSES. 
CLASS  A. 

E-31.  Collections,  Reading  Meters,  etc 41 

E-32.  Promotion  of  Business,  Salaries  and  Expenses 41 

CLASS  B. 

E-31  to  E-32.  Collection  and  Promotion  of  Business  Expense 41 

CLASS  C. 

E-31  to  E-32.  Collection  and  Promotion  of  Business  Expense ^ 41 

GENERAL  EXPENSES. 
CLASS  A. 

E-33.  Salaries  of  General  Officers 41 

E-34.  Salaries  of  General  Office  Clerks 41 

E-35.  Miscellaneous  General  Office  Supplies  and  Expenses 42 

E-36.  Law    Expenses — General : 42 

E-37.  Railroad  Commission  Expense 42 

E-38.   Injuries  and   Damages 42 

E-39.   Relief  Department  and  Expense 43 

E-40.  Water  Franchise  Requirements 43 

E-41.  Other  General  Expenses 43 

E— 12.   Insurance 43 

E-43.  Repairs  of  General  Structures 43 

E-44.   Repairs  of  General  Equipment 44 

E-45.  Undistributed  Adjustments — Balance 44 

E-4G.  Water   Expenses   Transferred — Cr 44 

E-47.  Joint  Operating  Expenses — Cr 44 

E-48.   Extraordinary  Repairs 45 

E-49.  Repairs  Charged  to  Reserve — Cr 45 

CLASS  B. 

E-33  to   E-35.  General  Officers  and  Clerks'  Salaries 41,42 

E-3G.                    Law  Expenses — General 42 

E-37.                    Railroad  Commission  Expense —                                           42 

E-38.                    Injuries  and  Damages .  42 

E-39  to  E-41.  Miscellaneous  General  Expenses .  43 

E-42.                    Insurance 43 

E-43  to  E-44.  Repairs  of  General  Structures  and  Equipment 43,44 

E-45  to  E-49.  Other  General  Expenses 44,45 

CLASS  C. 

E-33  to  E-49.  General  Expense 41,42,  43,  44,  45 


54  CLASSIFICATION   OF   ACCOUNTS,   WATER   CORPORATIONS. 

TAXES. 
CLASS  A.  PAGE 

E-50.  Taxes 45 

CLASS  B. 

E-50.  Taxes 45 

CLASS  C. 
E-50.  Taxes  _  -     45 


GENERAL  AMORTIZATION   OF  CAPITAL. 
CLASS  A. 

E-51.  Amortization  of  Franchises  and  Patents 45 

E-52.  Depreciation  of  Plant  and  Equipment 46 

CLASS  B. 

E-51  to  E-52.  Depreciation,  etc. 45,46 

CLASS  C. 
E-51  to  E-52.  Depreciation,  etc. 45,46 

CLEARING  ACCOUNTS. 

1.  Shop  Expenses 46 

2.  Stable  and  Garage  Expenses 46 

3.  Tool  Expenses 47 

4.  Supply  Expenses 47 

5.  Engineering  Expenses 47 

6.  Plant  Supervision  Expenses 47 


